Univ.of  ill. 
51 


Library 


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^ust  remain  on  file. 


BROOKLYN  RAPID  TRANSIT  COMPANY 


CENTRAL  UNION  TRUST  COMPANY 
OF  NEW  YORK. 


llnbenture, 

Dated  July  i,  1918, 

Securing 

#57>735>°oo  Three-Year  Seven  Per  Cent.  Secured 
Gold  Notes, 

Dated  July  1,  1918, 

Due  July  1,  1921, 

Interest  payable  January  1 and  July  1. 


Digitized  by  the  Internet  Archive 
in  2017  with  funding  from 

University  of  Illinois  Urbana-Champaign  Alternates 


https://archive.org/details/brooklynrapidtraOObroo 


Indenture,  dated  the  first  day  of  July,  1918,  by  and 
between  Brooklyn  Rapid  Transit  Company  (hereinafter  termed 
the  Transit  Company),  party  of  the  first  part,  and  Central 
Union  Trust  Company  of  New  York,  a corporation  organized 
and  existing  under  the  laws  of  the  State  of  New  York  (herein- 
after termed  the  Trustee),  party  of  the  second  part. 

The  Transit  Company  is  a corporation  duly  organized  and 
existing  under  the  laws  of  the  State  of  New  York,  having  its 
principal  office  and  place  of  business  and  legal  residence  in  the 
Borough  of  Brooklyn,  County  of  Kings,  in  said  state,  and  is  by 
its  certificate  of  incorporation  and  by  law  authorized  to  borrow 
money  and  to  issue  its  notes  and  other  obligations  therefor 
and  to  secure  the  same  by  the  pledge  of  bonds,  notes  and 
other  obligations  and  property.  Heretofore  and  under  date 
of  July  1,  1912,  the  Transit  Company  duly  executed  and 
delivered  to  Central  Trust  Company  of  New  York,  as  trustee, 
its  trust  agreement  securing  an  issue  of  Six-Year  Five 
Per  Cent.  Secured  Gold  Notes  of  the  Transit  Company, 
dated  July  1,  1912,  and  due  July  1,  1918,  of  which 
$57,735,000  face  amount  are  now  outstanding.  In  order 
to  provide  for  the  renewal  or  extension  in  whole  or  in 
part  of  said  notes  of  the  Transit  Company  maturing  July 
1,  1918  (hereinafter  termed  the  Five  Per  Cent.  Notes),  the 
Transit  Company,  pursuant  to  due  corporate  action,  has 
duly  determined  to  create  a new  issue  of  notes  to  the  aggre- 
^ gate  principal  amount  of  not  exceeding  $57,735,000,  to  be 
known  as  its  Three-Year  Seven  Per  Cent.  Secured  Gold  Notes 
(hereinafter  termed  the  Notes),  of  the  character  and  secured  as 
provided  in  this  Indenture. 

The  Notes  and  the  coupons  appurtenant  thereto  and  the 
Certificate  of  authentication  of  the  Trustee  thereon  are  to  be 
^ substantially  in  the  following  forms  respectively: 


s 


2 


[FORM  of  note.] 

$ $ 

No.  No. 

UNITED  STATES  OF  AMERICA. 

BROOKLYN  RAPID  TRANSIT  COMPANY 
Three-Year  Seven  Per  Cent.  Secured  Gold  Note. 

Brooklyn  Rapid  Transit  Company  (hereinafter  termed  the 
Trausit  Company),  for  value  received,  hereby  promises  to  pay 
to  the  bearer,  or,  if  this  Note  be  registered,  to  the  registered 
holder  hereof,  dollars,  in  gold  coin  of  the  United 

States  of  America,  of  or  equal  to  the  present  standard  of 
weight  and  fineness,  on  the  first  day  of  July,  11)21,  at  the 
office  of  Central  Union  Trust  Company  of  New  York,  in  the 
Borough  of  Manhattan,  in  the  City  of  New  York,  N.  Y.,  and  to 
pay  interest  thereon  from  Jul}r  1,  1918,  at  the  rate  of  seven  per 
centum  per  annum,  at  said  office,  in  like  gold  coin,  semi-annu- 
ally, on  the  first  day  of  January  and  the  first  day  of  July  in 
each  year,  but  only  upon  presentation  and  surrender  of  the 
coupons  hereto  annexed  as  they  severally  mature.  Both  the 
principal  and  interest  of  this  Note  are  payable  without  de- 
duction for  any  tax  or  governmental  charge  (other  than 
Federal  income  taxes  in  excess  of  two  per  cent,  per  annum, 
and  other  than  any  state  or  municipal  income  taxes)  which 
the  Transit  Company  or  the  Trustee  under  the  Indenture 
hereinafter  mentioned  may  be  required  to  pay  or  to  deduct 
therefrom  under  any  present  or  future  law  of  the  United 
States  of  America,  or  of  any  state,  county,  municipality  or 
other  taxing  authority  therein.  This  Note  is  one  of  an  issue 
of  Notes  limited  to  the  aggregate  principal  amount  of 
$57,785,000,  known  as  the  Three-Year  Seven  Per  Cent. 
Secured  Gold  Notes  of  the  Transit  Company,  all  of  like 


3 


tenor  ancl  date,  of  the  denominations  of  $1,000,  $500  and 
$100,  and  all  issued  under  and  equally  secured  by  an  In- 
denture dated  July  1,  1918.  between  the  Transit  Company 
and  Central  Union  Trust  Company  of  New  York,  as  Trustee, 
hereinafter  termed  the  Indenture.  For  the  nature  and  extent 
of  the  security  and  the  terms  and  conditions  upon  which 
the  Notes  are  secured,  reference  is  made  to  the  Indenture. 
The  entire  amount  of  Notes  at  any  time  outstanding, 
or  any  part  thereof  less  than  all,  is  subject  to  redemp- 
tion at  the  option  of  the  Transit  Company  on  any  semi-annual 
interest  payment  date  on  at  least  thirty  days’  prior  notice,  at 
the  face  value  of  said  Notes  and  accrued  interest,  together 
with  a premium  of  one-lialf  of  one  per  cent,  for  each  six 
months  from  the  date  for  which  said  Notes  are  called  fox- 
redemption  to  July  1,  1921,  as  provided  in  the  Indenture. 
The  Notes  of  this  issue  of  the  denomination  of  $100  are 
exchangeable  for  Notes  of  the  denomination  of  $1,000, 
when  presented  in  amounts  aggregating  at  face  value  $1,000, 
as  provided  in  the  Indenture.  This  Note  shall  pass 
by  delivery  unless  registered  in  the  name  of  the  holder 
on  the  books  of  the  Transit  Company  at  the  office  of 
the  Trustee  in  the  Borough  of  Manhattan,  in  the  City 
of  New  York,  such  registry  being  noted  on  this  Note  by 
the  Trustee.  After  such  registry  no  transfer  shall  be  valid 
unless  made  on  said  books  by  the  registered  holder  in  person 
or  by  his  attorney  duly  authorized  aud  similarly  noted  on  this 
Note,  but  this  Note  may  be  discharged  from  registry  by  a 
transfer  on  said  register  to  bearer  and  thereupon  transfer- 
ability  by  delivery  shall  be  restoied.  This  Note  may  again, 
from  time  to  time,  be  registered  or  ti'ausferred  to  bearer. 
Registration  of  this  Note  shall  not  affect  the  negotiability  of 
the  coupons,  which  shall  continue  to  be  transferable  by  de- 
livery. This  Note  shall  not  be  valid  or  become  obligatory  for 
any  purpose  until  it  shall  have  been  authenticated  by  the  cer- 
tificate of  the  Trustee  under  the  Indenture,  hereon  endorsed. 


4 


In  witness  wiieiieof  Brooklyn  Rapid  Transit  Company 
has  caused  this  Note  to  he  signed  by  its  president  or  one  of 
its  vice-presidents,  and  by  its  secretary  or  an  assistant  secre- 
tary, and  coupons  for  said  interest  to  be  attached  thereto,  as 
of  this  first  day  of  July,  1918. 

Brooklyn  Rapid  Transit  Company, 

By 


Attest  : 


Vice-President. 


Assistant  Secretary. 


[form  of  interest  coupon.] 

No.  $ 

On  the  first  day  of  , 19  , Brooklyn  Rapid 

Transit  Company  will  pay  to  bearer,  at  the  office  of  Central 
Union  Trust  Company  of  New  York,  in  the  Borough  of  Man- 
hattan, City  of  New  York,  N.  Y.,  dollars,  United 

States  gold  coin,  being. six  months’  interest  then  due  on  its 
Three-Year  Seven  Per  Cent.  Secured  Gold  Note  No. 
unless  said  Note  shall  have  been  called  for  previous  re- 
demption. 


Treasurer. 


[form  of  trustee’s  certificate.] 


This  Note  is  one  of  the  Notes  described  in  the  within- 
mentioned  indenture. 

Central  Union  Trust  Company  of  New  York, 

Trustee, 


By 


5 


The  Transit  Company,  in  further  pursuance  of  due  cor- 
porate action,  has  determined  that  the  Notes  be  secured  as 
herein  provided,  and  has  authorized  the  execution  and  delivery 
of  this  Indenture. 

All  things  necessary  to  make  the  Notes,  when  authenti- 
cated by  the  Trustee  and  issued  by  the  Transit  Company,  the 
valid,  binding  and  legal  obligations  of  the  Transit  Company, 
and  to  make  this  Indenture  a valid,  binding  and  legal  inden- 
ture for  the  security  thereof,  have  been  done  and  performed. 

Now,  therefore,  this  Indenture  witnesseth,  that 
in  order  to  secure  the  payment  of  all  of  the  Notes  at  any 
time  issued  and  outstanding  under  this  Indenture,  according  to 
their  tenor,  purport  and  effect,  as  well  the  interest  as  the  prin- 
cipal thereof,  and  to  secure  the  performance  and  observance  of 
all  the  covenants  and  conditions  therein  and  herein  contained, 
and  to  declare  the  terms  and  conditions  upon  which  the  Notes  are 
issued,  received  and  held,  and  for  and  in  consideration  of  the 
premises  and  of  the  acceptance  or  purchase  of  the  Notes  by  the 
holders  thereof,  and  of  the  sum  of  one  hundred  dollars,  lawful 
money  of  the  United  States  of  America,  to  the  Transit  Com- 
pany duly  paid  by  the  Trustee  at  or  before  the  ensealing  and 
delivery  of  these  presents,  the  receipt  whereof  is  hereby  ac- 
knowledged, the  Transit  Company  hath  sold,  assigned,  trans- 
ferred, pledged  and  set  over,  and  by  these  presents  doth  sell, 
assign,  transfer,  pledge  and  set  over  unto  the  Trustee,  its 
successors  in  the  trust,  and  its  and  their  assigns,  the  following 
securities  and  property  to  be  delivered  to  the  Trustee  from 
time  to  time  as  hereinafter  in  this  Indenture  provided  and 
(subject  to  the  terms  and  provisions  of  this  Indenture  regard- 
ing the  sale  or  other  disposition  of  said  securities  and  prop- 
erty) to  remain  in  the  possession  of  the  Trustee  at  its  office 
Number  80  Broadway,  Borough  of  Manhattan,  City,  County 
and  State  of  New  York  : 

(A)  Five  Per  Cent.  Notes  of  the  Transit  Company  issued 
under  the  trust  agreement  hereinbefore  referred  to  and  secured 


6 


as  hereinafter  stated,  to  an  amount  equal  at  face  value  to  the 
face  value  of  the  Notes  at  the  time  authenticated  and  de- 
livered under  this  Indenture;  and/or  cash  to  an  amount  equal 
to  the  face  value  of  the  Notes  so  authenticated  and  delivered  ; 
said  Five  Per  Cent.  Notes  are  secured  b}7  the  deposit  and 
pledge  with  the  trustee  under  said  trust  agreement  of  the 
following  securities  : 

(1)  $10,000,000  face  amount  of  the  First  Refunding 
Mortgage  Gold  Bonds  of  the  Transit  Company,  bearing 
interest  at  the  rate  of  four  per  cent,  per  annum,  (herein- 
after termed  the  First  Refunding  Bonds)  issued  under  its 
First  Refunding  Mortgage  to  Central  Trust  Com  pan}7  of 
New  York  as  trustee,  dated  July  1,  1902,  and  bearing  all 
unmatured  coupons. 

(2)  $57,735,000,  face  amount  of  the  First  Mortgage 
Five  Per  Cent.  Sinking  Fund  Gold  Bonds  (hereinafter 
termed  the  First  Mortgage  Bonds),  Series  A,  of  New 
York  Municipal  Railway  Corporation  (hereinafter 
termed  the  Subway  Company),  bearing  interest  at  the 
rate  of  five  per  cent,  per  annum,  issued  under  its  First 
Mortgage  to  Central  Trust  Company  of  New  York  as 
trustee,  dated  July  1,  1012,  and  bearing  all  uumatured 
coupons.  The  First  Mortgage  Bonds  bear  the  endorse- 
ment of  New  York  Consolidated  Railroad  Company 
(hereinafter  termed  the  Railroad  Company),  guarantee- 
ing and  assuming  aud  agreeing  to  pay  the  principal  aud 
interest  of  said  bonds  aud  the  sinking  fund  provided 
for  in  the  mortgage  securing  the  same,  aud  bear  also 
the  endorsement  of  the  Transit  Company  assuming  and 
agreeing  to  pay  said  principal,  interest  aud  sinking  fund. 

The  bonds  mentioned  and  described  in  the  preceding 
paragraphs  (1)  and  (2)  aie  assigned  and  pledged  under  this 
Indenture  subject  to  the  pledge  of  said  bonds  with  the  trustee 
under  the  trust  agreement  securing  the  Five  Per  Cent.  Notes 
of  the  Transit  Company. 


7 


(B)  $29,000,000  face  amount  of  the  Consolidated  and  Re- 
funding Mortgage  Gold  Bonds  (hereinafter  termed  the  Consol- 
idated Bonds),  Series  A,  of  the  Transit  Company,  bearing 
interest  at  the  rate  of  six  per  cent,  per  annum,  issued  under  its 
Consolidated  and  Refunding  Gold  Mortgage  to  Central  Union 
Trust  Company  of  New  York  as  trustee,  dated  June  1,  1918, 
and  bearing  all  unmatured  coupons;  or,  in  case  of  the  authen- 
tication and  delivery  hereunder  of  Notes  to  a face  amount  of 
less  than  $57,735,000,  a proportionately  less  amount  of  said 
Consolidated  Bonds. 

(C)  Such  additional  amount  of  Consolidated  Bonds,  bearing 
all  unmatured  coupons,  as  shall  be  equal,  at  the  face  value  of 
said  bonds,  to  expenditures  made  by  the  Transit  Company 
from  time  to  time  and  at  any  time  prior  to  the  payment  in  full 
of  the  principal  and  interest  of  the  Notes  out  of  the  current 
surplus  earnings  of  the  Transit  Company  for  capital  purposes 
and  for  which  the  Transit  Company  may  be  or  become  entitled 
to  the  authentication  and  delivery  of  Consolidated  Bonds  from 
the  trustee  of  the  mortgage  securing  said  bonds. 

(D)  Such  additional  amount  of  First  Mortgage  Bonds  of 
the  Subway  Company,  bearing  all  unmatured  coupons,  and 
bearing  the  endorsements  referred  to  in  paragraph  (2)  of  clause 
(A)  of  these  granting  clauses,  as  may  from  time  to  time  and  at 
any  time  prior  to  the  payment  in  full  of  the  principal  and  in- 
terest of  the  Notes  be  purchased  or  acquired  by  the  Transit 
Company  out  of  its  current  surplus  earnings. 

To  have  and  to  hold  all  and  singular  said  securities 
and  property  (hereinafter  some  times  termed  the  trust  estate) 
unto  the  Trustee  and  its  successors  in  the  trust  and  its 
and  their  assigns  forever  ; 

In  trust,  nevertheless,  for  the  common  and  equal  use, 
benefit  and  security  of  all  and  singular  the  person  or  persons, 
firm  or  firms,  bodies  politic  or  corpox-ate,  who  shall  from  time 
to  time  be  holders  of  any  of  the  Notes  or  of  the  coupons 
thereto  appertaining,  and  without  preference  of  any  of  the 


8 


Notes  over  any  of  the  others  by  reason  of  priority  in  the  time 
of  issue  or  negotiation  thereof  or  otherwise  howsoever  ; sub- 
ject to  the  terms,  provisions  and  stipulations  in  the  Notes 
and  in  this  Indenture  contained,  and  for  the  uses  and  purposes 
and  upon  and  subject  to  the  terms,  conditions,  provisos  and 
agreements  hereinafter  expressed  and  declared,  that  is  to  say : 

ARTICLE  I. 

Section  1.  The  Notes,  together  with  the  interest  coupons 
appertaining  thereto,  shall  be  substantially  of  the  tenor  and 
purport  above  recited,  and  shall  be  of  the  denominations  of 
$1,000,  $500  and  $100.  The  amount  of  the  Notes  is  limited, 
so  that  there  shall  never  be  at  any  lime  outstanding 
under  this  Indenture  Notes  for  an  aggregate  principal 
sum  of  more  than  $57,735,000.  The  Notes  shall 
from  time  to  time  be  executed  on  behalf  of  the 
Transit  Company  and  delivered  to  the  Trustee  for  authen- 
tication by  it.  In  case  the  officers  who  shall  have  signed  any 
of  the  Notes  shall  cease  to  be  such  officers  of  the  Transit  Com- 
pany before  the  Notes  so  signed  shall  have  been  actually 
authenticated  and  delivered  by  the  Trustee,  such  Notes  may, 
nevertheless,  be  adopted  by  the  Transit  Company  and  be 
authenticated  and  delivered  and  issued  as  though  the  persons 
who  signed  such  Notes  had  not  ceased  to  be  the  officers  of 
the  Transit  Company.  The  coupons  to  lie  attached  to  the 
Notes  shall  be  authenticated  by  a facsimile  of  the  signa- 
ture of  the  present  treasurer  or  any  future  treasurer  of  the 
Transit  Company,  and  the  Transit  Company  may  adopt  and 
use  for  that  purpose  a facsimile  of  the  signature  of  any  person 
who  shall  have  been  such  treasurer,  notwithstanding  the  fact 
he  may  have  ceased  to  be  such  treasurer  at  the  time  such 
Notes  shall  be  actually  authenticated,  delivered  and  issued. 
Only  such  of  the  Notes  as  shall  bear  thereon  a certificate  of 
authentication  in  substantially  the  form  hereinbefore  recited, 
executed  by  the  Trustee,  shall  be  secured  by  this  Indenture  or 


9 


entitled  to  any  lien,  right  or  benefit  hereunder,  and  such 
authentication  of  the  Trustee  upon  any  such  Note  executed 
on  behalf  of  the  Transit  Company  shall  be  conclusive  evi- 
dence that  such  Note  has  been  duly  authenticated  and  de- 
livered hereunder  and  that  the  same  is  entitled  to  the  benefit 
of  the  trust  hereby  created.  Before  authenticating  or  de- 
livering any  Note,  the  Trustee  shall  detach  and  cancel  all 
coupons  thereon  then  matured. 

Section  2.  Notes  of  the  denomination  of  $1,000  shall  be 
numbered  consecutively  from  Ml  upwards,  and  Notes  of  the 
denomination  of  $500  shall  be  numbered  consecutively  from 
D 1 upwards.  In  the  case  of  the  issue  of  Notes  of  the  denomina- 
tion of  $100,  the  same  serial  number  shall  be  borne  by  ten  of 
such  Notes,  the  serial  number  to  be  immediately  followed  in 
the  case  of  one  of  such  Notes  by  the  letter  A and  in  the  case 
of  the  others  of  such  Notes  by  the  letter  B and  consecutively 
onwards,  and  every  such  Note  of  the  denomination  of  $100 
shall  bear  thereon  an  endorsement  substantially  to  the  follow- 
ing effect : 

For  this  Note  and  nine  other  Notes  of  the  same 
denomination  and  serial  number  bearing  affixed  letters 
A to  J,  a Note  for  $1,000  is  held  in  reserve  and  is  not 
contemporaneously  outstanding  ; and,  on  the  surrender 
and  cancellation  of  ten  $100  Notes,  a Note  for  $1,000 
will  be  issued  in  exchange  therefor  bearing  the  lowest 
serial  number  reserved  for  such  purpose. 

At  all  times  there  shall  be  reserved  unissued  by  the  Transit 
Company,  for  exchange  for  Notes  of  the  denomination  of 
$100,  an  aggregate  face  amount  of  Notes  of  the  denomination 
of  $1,000  equal  to  the  aggregate  face  amount  of  Notes  of  the 
denomination  of  $100  at  the  time  issued  and  outstand- 
ing. Wheuever  ten  Notes  of  the  denomination  of  $100 
each,  endorsed  as  aforesaid,  in  negotiable  form  and  having  all 
unmatured  coupons  attached  thereto,  shall  be  surrendered  in 


10 


exchange  for  a Note  of  the  denomination  of  $1,000,  the  Transit 
Company  shall  issue  and  the  Trustee  shall  authenticate  and 
deliver  a Note  of  the  denomination  of  $1,000  with  all  unma- 
tured coupons  attached  thereto  and  bearing  the  lowest  serial 
number  tlieu  reserved  for  any  such  exchange.  In  every  case 
of  such  exchange  the  Trustee  shall  forthwith  cancel  the  sur- 
rendered Note  or  Notes  and  coupons  and  shall  deliver  the 
same  to  the  Transit  Company  upon  its  written  request  therefor. 

Section  3.  The  Notes  shall  be  executed  by  the  Transit 
Company  and  delivered  to  the  Trustee  for  authentication  and 
shall  be  authenticated  and  delivered  by  the  Trustee  from  time 
to  time  as  follows : 

Upon  the  delivery  to  the  Trustee  of  a written  order  of  the 
Transit  Company  for  the  authentication  and  delivery  of  a 
specified  amount  of  Notes  and  upon  the  deposit  and  pledge 
with  the  Trustee  of 

(1)  Five  Per  Cent.  Notes  to  an  amount  equal  at 
face  value  to  the  face  value  of  the  Notes  specified  in 
such  written  order;  and/or  cash  to  an  amount  equal  to 
the  face  value  of  the  Notes  so  specified  ; and 

(2)  Consolidated  Bonds,  Series  A,  to  an  amount 
bearing  the  same  proportion  to  $'29,000,000  as  the 
amount  of  Notes  specified  in  such  written  order  bears 
to  $57,735,000 ; 

the  Trustee  shall  authenticate  and  delivei  to  or  upon  the  order 
of  the  Transit  Company  Notes  hereby  secured  to  an  amount 
equal  to  the  aggregate  of  the  face  amount  of  Five  Per  Cent. 
Notes  and  of  the  cash  so  delivered  to  the  Trustee. 

Any  cash  deposited  with  the  Trustee  as  aforesaid  shall  be 
released  and  paid  by  the  Trustee  from  time  to  time  to  or  upon 
the  written  order  of  the  Transit  Company  upon  the  deposit  and 
pledge  with  the  Trustee  of  Five  Per  Cent.  Notes  (in  addition 
to  those  previously  pledged  hereunder)  to  an  amount  equal  at 
face  value  to  the  principal  amount  of  the  cash  so  released  and 
paid.  Auy  interest  allowed  by  the  Trustee  upon  any  cash 


11 


deposited  with  it  as  aforesaid  shall  be  released  and  paid  by 
by  the  Trustee  from  time  to  time  to  or  upon  the  order  of  the 
Transit  Company  upon  its  written  request  therefor  so  long  as 
no  default  shall  have  been  made  by  the  Transit  Company  in 
the  observance  or  performance  of  any  of  the  covenants  or 
agreements  contained  in  this  Indenture  on  the  part  of  the 
Transit  Company  to  be  observed  or  performed. 

The  Trustee  shall  be  subrogated  to  all  the  rights  and 
remedies  of  the  former  holders  of  all  Five  Per  Cent.  Notes  at 
any  time  deposited  and  pledged  with  the  Trustee  under  this 
Indenture. 

The  Transit  Company  covenants  that  as  soon  as  practi- 
cable it  will  procure  the  satisfaction  and  discharge  of  the  trust 
agreement  securing  the  Five  Per  Cent.  Notes  and  the  delivery 
to  and  pledge  with  the  Trustee  hereunder  of  the  bonds  now 
pledged  under  said  trust  agreement.  In  order  to  effect  the 
satisfaction  and  discharge  of  said  trust  agreement,  the  Trustee 
hereunder  may,  upon  the  written  request  of  the  Transit 
Company,  cancel  and  surrender  to  the  trustee  under  said 
trust  agreement  the  Five  Per  Cent.  Notes  held  by  the  Trustee 
hereunder,  but  upon  the  satisfaction  and  discharge  of  said  trus< 
agreement  said  Five  Per  Cent.  Notes  shall  be  returned  to  the 
Trustee  heimmder  and  held  by  it  as  part  of  the  trust  estate, 
and  notwithstanding  the  cancellation  of  said  Five  Per  Cent. 
Notes  and  the  satisfaction  and  discharge  of  the  trust  agree- 
ment securing  the  same  the  Trustee’s  rights  of  subrogation 
shall  continue  unimpaired  as  against  the  Transit  Company  to 
the  full  extent  necessary  for  the  protection  and  security  of  the 
Trustee  hereuuder  and  of  the  holders  of  the  Notes  issued  under 
this  Indenture. 

Upon  the  delivery  to  and  the  pledge  and  deposit  with  the 
Trustee  hereunder  of  the  bonds  now  pledged  under  the  trust 
agreement  securing  the  Five  Per  Cent.  Notes,  the  Trustee  shall 
release  and  pay  to  or  upon  the  written  order  of  the  Transit 
Company  any  and  all  amounts  of  cash,  together  with  any  in- 
terest thereon  allowed  by  the  Trustee,  previously  deposited 


12 


with  the  Trustee  as  provided  in  this  Section  3 which  shall  not 
theretofore  have  been  released  and  paid  by  the  Trustee  as 
hereinbefore  provided. 

Section  4.  The  Transit  Company  shall  keep,  at  the  office 
of  the  Trustee,  in  the  Borough  of  Manhattan,  in  the  City 
and  State  of  New  York,  books  for  the  registration  and  transfer 
of  the  Notes,  and  such  books  shall,  at  all  reasonable  times,  be 
open  for  inspection  by  the  Trustee  or  by  any  holder  of  the 
Notes;  and,  upon  presentation  for  such  purpose  at  said  office 
of  any  Note  or  Notes  entitled  to  be  there  registered,  the  Transit 
Company  will  register  or  cause  to  be  registered  therein,  as 
hereinafter  provided,  the  Note  or  Notes  so  presented,  under 
such  reasonable  regulations  as  it  may  prescribe,  but  without 
charge. 

Section  5.  The  holder  of  any  Note  may  have  the  owner- 
ship thereof  registered  on  said  books  of  the  Transit  Company 
at  said  office  in  the  Borough  of  Manhattan,  in  the  City  of  New 
York,  and  such  registration  noted  on  the  Note.  After  such 
registration,  no  transfer  shall  be  valid  unless  made  on  said 
books  at  such  office  by  the  registered  holder  in  person  or  bv 
his  attorney  duly  authorized,  and  similarly  noted  on  the  Note, 
but  such  Note  may  be  discharged  from  registry  by  being  in 
like  manner  transferred  to  bearer,  after  which  it  shall  again  be 
transferable  by  delivery,  and  such  Note  may  again  from 
time  to  time  be  registered  or  transferred  to  bearer  as  before. 
Registration  of  any  Note  shall  not  affect  the  negotiability  of 
the  coupons  belonging  to  such  Note,  but  every  such  coujiou 
shall  continue  to  be  transferable  by  delivery  merely  and  shall 
remain  payable  to  bearer. 

Section  (5.  As  to  any  Note  registered  as  to  principal,  the 
person  in  whose  name  such  Note  shall  be  registered  shall,  for 
all  purposes  of  this  Indenture,  be  deemed  and  regarded  as 
the  owner  thereof,  and  payment  of  the  principal  of  such 
Note  shall  be  made  only  to  or  upon  the  order  of  the  registered 


13 


owner  thereof,  but  such  registration  may  be  changed  as  above 
provided.  All  such  payments  shall  be  valid  and  effectual  to 
satisfy  and  discharge  the  liability  upon  such  Note  to  the 
extent  of  the  sum  or  sums  so  paid.  The  Transit  Company 
and  the  Trustee  may  deem  and  treat  the  bearer  of  any  Note 
which  shall  not  at  the  time  be  registered  as  to  principal,  and 
the  bearer  of  any  coupon  for  interest  upon  any  Note,  whether 
such  Note  shall  be  registered  or  not,  as  the  absolute  owner  of 
such  Note  or  of  such  coupon,  for  the  purpose  of  receiving 
payment  thereof  and  for  all  other  purposes  whatsoever,  and 
neither  the  Transit  Company  nor  the  Trustee  shall  be  affected 
by  any  notice  to  the  contrary. 

Section  7.  In  case  any  Note,  with  the  coupons  thereto 
appertaining,  shall  become  mutilated  or  be  destroyed  or  lost, 
the  Transit  Company  in  its  discretion  may  issue,  and  thereupon 
the  Trustee  shall  authenticate  and  deliver,  a new  Note  of  like 
tenor,  date  and  denomination,  bearing  the  same  serial  number, 
in  exchange  and  substitution  for,  and  upon  cancellation  of,  the 
mutilated  Note  and  its  coupons,  or  in  lieu  of  and  substitution 
for  the  Note  and  its  coupons  so  destroyed  or  lost.  The  appli- 
cant for  such  substituted  Note  shall  furnish  to  the  Transit 
Company  and  to  the  Trustee  evidence  of  the  destruction  or 
loss  of  such  Note  and  its  coupons  so  destroyed  or  lost,  which 
evidence  shall  be  satisfactory  to  the  Transit  Company  and  to 
the  Trustee  in  their  discretion ; said  applicant  shall  also 
furnish  indemnity  satisfactory  to  both  of  them  in  their  discre- 
tion and  shall  comply  with  such  other  reasonable  regulations 
as  the  Transit  Company  and  the  Trustee  may  prescribe. 

Section  8.  Pending  the  preparation  of  the  definitive  Notes 
the  Transit  Company  may  execute  and  deliver  temporary 
printed  or  lithographed  Notes,  substantially  in  the  form  of  the 
Notes  hereinbefore  recited,  either  payable  to  bearer  or  to  the 
registered  holder  thereof,  and  in  the  denomination  of  one 
hundred  dollars  or  any  multiple  thereof,  and  either  with  or 
without  coupons.  Each  temporary  Note  shall  bear  upon  its 


14 


face  the  words  “Temporary  Note,  exchangeable  for  a like 
principal  amount  of  definitive  Notes.” 

The  temporary  Notes  shall  be  authenticated  and  delivered 
by  the  Trustee  in  the  same  manner  and  subject  to  the  same 
restrictions  as  herein  provided  for  the  definitive  Notes  and 
the  certificate  of  authentication  of  the  Trustee  upon  any  such 
temporary  Note  shall  be  conclusive  evidence  that  such  tem- 
porary Note  has  been  duly  authenticated  and  delivered  here- 
under and  that  the  same  is  entitled  to  the  benefit  of  the  trust 
hereby  created. 

The  temporary  Notes  authenticated  and  delivered  here- 
under shall  be  exchangeable  without  charge  for  a like 
principal  amount  of  definitive  Notes  to  be  issued  here- 
under, and  immediately  upon  any  such  exchange  the  tem- 
porary Notes  surrendered  shall  be  cancelled  by'  the  Trustee, 
and  shall  be  delivered  to  the  Transit  Company  upon  its  written 
demand  therefor.  Until  so  exchanged  the  temporary  Notes 
authenticated  and  delivered  hereunder  in  all  respects  shall  be 
entitled  to  the  benefits  and  security  of  this  Indenture  as  Notes 
issued  and  outstanding  thereunder. 

ARTICLE  II. 

Section  1.  At  the  election  of  the  Transit  Company  and  on 
notice  of  such  election  given  in  the  manner  herein  provided,  all 
of  the  Notes  at  any  time  issued  and  outstanding,  or  any  part 
thereof  less  than  all,  may  be  redeemed  on  any  semi-annual  in- 
terest payment  date,  at  the  face  value  of  said  Notes  and  accrued 
interest,  together  with  a premium  of  one-half  of  one  per  cent, 
for  each  six  months  from  the  date  for  which  said  Notes  are 
called  for  redemption  to  July  1,  1921,  that  is  to  say  : 

On  January  1,  1919,  at  102£,  and  accrued  interest. 

“ July  1,  1919,  “ 102,  “ 

“ January  1,  1920,  “ 104,  “ 

“ July  1,  1920,  “ 101,  “ 

“ January  1,  1921,  “ 100£,  “ “ “ 


15 


Section  2.  Notice  of  any  election  of  the  Transit  Company 
to  redeem,  as  aforesaid,  all  of  the  Notes  at  any  time  issued 
and  outstanding,  or  any  part  thereof  less  than  all,  shall  be 
given  by  publication  of  such  notice  in  two  daily  news- 
papers of  general  circulation  in  the  Borough  of  Manhattan, 
in  the  City  of  New  York,  twice  a week  for  four  successive 
weeks,  the  first  publication  to  be  at  least  thirty  days  prior  to 
the  day  on  which  said  redemption  is  to  be  made,  stating 
such  election  on  the  part  of  the  Transit  Company,  the 
date  of  redemption,  that  the  Transit  Company  has  called 
for  redemption  Notes  to  the  amount  set  forth  in  such 
notice  and,  in  case  less  than  all  of  the  Notes  are  to  be  redeemed, 
the  serial  numbers  of  the  Notes  to  lie  redeemed  (such  num- 
bers to  be  drawn  by  lot  by  the  Trustee),  that  the  interest  on 
the  Notes  so  called  for  redemption  will  cease  on  the  day  so 
fixed  for  the  redemption  thereof,  and  requiring  that  the  Notes 
be  then  presented  for  redemption  at  the  office  of  the  Trustee 
in  the  Borough  of  Manhattan,  in  the  City  of  New  York.  A 
similar  notice  shall  be  sent  by  the  Transit  Company  through 
the  mails,  postage  prepaid,  at  least  thirty  days  prior  to  the 
date  so  fixed  for  redemption,  to  all  registered  holders  of 
Notes  whose  addresses  shall  appear  upon  the  transfer  register, 
directed  to  them  at  such  addresses.  The  principal  of  all  of 
the  Notes  so  called  for  redemption  shall  become  due  and 
payable  on  the  day  so  fixed  for  the  redemption  thereof,  and, 
notice  having  been  so  given,  the  interest  on  the  Notes  so  called 
for  redemption  shall  cease  on  the  day  so  fixed  for  the  redemp- 
tion thereof.  On  presentation,  in  accordance  with  said  notice, 
of  the  Notes  so  called  for  redemption,  in  negotiable  form,  with 
the  coupon  maturing  on  the  day  fixed  for  such  redemption  and 
all  subsequent  coupons,  and  on  the  surrender  thereof,  the  Notes 
so  called  for  redemption  shall  be  paid  by  the  Transit  Company 
with  accrued  interest  to  the  date  of  such  redemption  and  with 
the  premium  above  mentioned.  If  not  so  paid  on  presentation 
thereof,  such  Notes  shall  continue  to  bear  interest  at  the  rate 
of  seven  per  cent,  per  annum. 


in 


On  deposit  with  the  Trustee  of  the  amount  necessary  so 
to  redeem  all  the  Notes  outstanding  (including  interest  and 
premium)  and  proof  satisfactory  to  the  Trustee  of  the  due 
publication  and  mailing  of  notice  of  redemption  thereof 
and  of  the  payment  of  all  interest  coupons  matured  prior 
to  the  date  fixed  for  such  redemption  or  making  provision 
for  the  payment  of  such  past  due  coupons  satisfactory  to  the 
Trustee,  and  upon  payment  of  all  costs,  charges  and  expenses 
incurred  by  the  Trustee  and  of  a reasonable  compensation  to 
the  Trustee,  the  Trustee  shall  cancel  and  satisfy  this  Inden- 
ture, and,  on  written  demand  of  the  Transit  Company  and  at 
its  cost  and  expense,  shall  assign  and  deliver  the  trust  estate  to 
the  Transit  Company.  The  Trustee  shall  apply  the  moneys  so 
deposited  with  it  to  the  payment  of  the  Notes  at  the  rate 
aforesaid,  with  accrued  interest  to  the  day  designated  for 
redemption,  and  shall  in  no  event  be  liable  beyond  the  amount 
so  deposited  with  it,  nor  for  the  giving  or  manner  of  giving 
such  notice  of  redemption. 

All  Notes  and  coupons  redeemed  under  the  provisions 
of  this  Indenture  shall  be  cancelled  and  shall,  on  its 
written  request,  be  delivered  to  the  Transit  Company,  and  no 
Notes  shall  be  issued  in  lieu  thereof. 

Section  3.  On  the  redemption  as  provided  in  this  Article 
II  of  any  part  less  than  all  of  the  Notes,  or  on  the  de- 
posit with  the  Trustee  of  an  amount  in  cash  necessary 
to  effect  such  redemption  (including  interest  and  premium), 
together  with  proof  satisfactory  to  the  Trustee  of  the 
due  publication  and  mailing  of  notice  of  such  redemption, 
the  Trustee  shall  release  and  deliver  to  or  upon  the  written 
order  of  the  Transit  Company  an  amount  of  bonds  of  each  of 
the  classes  then  deposited  and  pledged  with  the  Trustee  here- 
under as  shall  bear  as  nearly  as  may  be  to  the  total  amount  of 
the  bonds  of  each  of  said  classes  so  deposited  and  pledged  the 
same  proportion  as  the  amount  of  Notes  so  redeemed  or  called 


17 


for  redemption  bears  to  the  total  amount  of  Notes  then  issued 
and  outstanding. 

Section  4.  The  Transit  Company  shall  have  the  right 
at  any  time  and  from  time  to  time  to  surrender  to  the 
Trustee  for  cancellation  Notes  issued  hereunder,  in  negoti- 
able form  with  all  unmatured  coupons,  and  upon  the 
delivery  to  the  Trustee  of  any  Notes  and  coupons  so 
surrendered,  the  Trustee  shall  forthwith  cancel  the  Notes 
and  coupons  so  surrendered  and  shall  thereupon  release  and 
deliver  to  or  upon  the  written  order  of  the  Transit  Company 
an  amount  of  bonds  of  each  of  the  classes  then  deposited  and 
pledged  with  the  Trustee  hereunder  as  shall  bear  as  nearly 
as  may  be  to  the  total  amount  of  the  bonds  of  each  of  said 
classes  so  deposited  and  pledged  the  same  proportion  as  the 
amount  of  Notes  so  surrendered  and  cancelled  bears  to  the 
total  amount  of  Notes  then  issued  and  outstanding. 

All  Notes  and  coupons  surrendered  to  the  Trustee  as  above 
provided  shall  upon  the  cancellation  thereof  be  delivered  to 
the  Transit  Company  upon  its  written  request  therefor,  and 
no  Notes  shall  be  issued  in  lieu  thereof. 

ARTICLE  III. 

Section  1.  The  Trustee  is  authorized  in  its  discretion, 
and  without  any  obligation  so  to  do,  to  cause  to  be  regis- 
tered in  its  name  as  Trustee  any  and  all  coupon  bonds 
which  the  Trustee  shall  receive  as  security  under  any  of 
the  provisions  of  this  Indenture.  The  Trustee  shall  cause 
to  be  transferred  into  its  name  as  Trustee  any  registered 
bonds  which  shall  be  delivered  to  the  Trustee  or  which  it  shall 
receive  on  the  trusts  hereof. 

Upon  the  delivery  to  the  Trustee  of  the  First  Refunding 
Bonds  specified  in  paragraph  (1)  of  clause  (A)  of  the  granting 
clauses  of  this  Indenture,  the  Trustee  shall  deliver  said  bonds 
to  the  trustee  under  the  mortgage  securing  the  Consolidated 


18 


Bonds  referred  to  in  clause  (B)  of  said  granting  clauses  in  ex- 
change for  a like  face  amount  of  said  Consolidated  Bonds, 
Series  A,  and  the  Consolidated  Bonds  so  received  by  the 
Trustee  in  exchange  for  such  First  Refunding  Bonds  shall 
thereupon  be  held  by  the  Trustee  as  part  of  the  trust  estate 
under  this  Indenture.  The  Transit  Company  covenants  that 
it  will  issue  and  will  deliver  or  cause  to  be  delivered  to  the 
Trustee  the  Consolidated  Bonds  to  be  received  by  the  Trustee 
in  exchange  for  First  Refunding  Bonds  as  herein  provided. 

Section  2.  Unless  and  until  (1)  there  shall  be  a default 
in  the  payment  of  the  interest  or  of  the  principal  of  some  one 
or  more  of  the  Notes,  or  (2)  there  shall  be  a default  in  the 
payment  of  the  interest  or  of  the  principal  of  some  one  or 
more  of  the  First  Mortgage  Bonds  of  the  Subway  Com- 
pany, or  in  the  payment  of  the  sinking  fund  provided 
for  in  the  mortgage  securing  said  bonds,  or  (3)  there  shall 
be  a default  in  the  payment  of  the  interest  or  of  the 
principal  of  some  one  or  more  of  the  First  Refunding  Bonds 
or  of  the  Consolidated  Bonds  while  any  of  said  First  Re- 
funding Bonds  or  of  said  Consolidated  Bonds  constitute  part 
of  the  trust  estate,  or  (4)  a receiver  of  the  Transit  Company 
or  of  its  property  or  of  the  Subway  Company  or  of  its  property 
or  of  the  Railroad  Company  or  of  its  property  shall  have 
been  lawfully  appointed,  or  (5)  default  shall  be  made 
under  tlie  contract  and  lease  referred  to  in  and  pledged 
under  the  First  Mortgage  of  the  Subway  Company, 
which  default  under  the  terms  of  said  contract  and 
lease  is  such  that  the  City  of  New  York  may  terminate 
said  lease  and  provided  such  last  mentioned  default  shall 
continue  after  notice  thereof  given  by  said  City  for  two- 
thirds  of  the  period  on  the  expiration  of  which  the  City 
may  so  terminate  said  lease,  and  provided  also  that  in  the 
judgment  of  the  Trustee  action  in  good  faith  shall  not  have 
been  taken  and  prosecuted  with  sufficient  diligence  to  reason- 
ably assure  the  curing  of  such  default  within  said  period  — 


19 


the  Trustee  shall  not,  except  with  the  consent  of  the  Transit 
Company,  be  entitled  to  collect  any  of  the  interest  on  the 
pledged  securities,  and  the  Trustee  shall,  as  they  mature,  cut 
off  and  cancel  the  coupons  on  any  coupon  bonds  of  the  Transit 
Company  constituting  part  of  the  trust  estate  and,  on  the 
written  demand  of  the  Transit  Company,  deliver  such  cou- 
pons so  cancelled  to  the  Transit  Company,  and  the  Trustee 
shall,  as  they  mature,  cut  off  and  deliver  to  the  Transit  Com- 
pany, uncancelled,  the  coupons  appertaining  to  the  First  Mort- 
gage Bonds  of  the  Subway  Company  pledged  hereunder.  If 
any  such  coupons  appertaining  to  First  Mortgage  Bonds  of 
the  Subway  Company  delivered  to  the  Transit  Company  as 
aforesaid  shall  not  be  forthwith  cancelled,  the  Transit  Com- 
pany covenants  that  it  will  forthwith  return  the  same  to  the 
Trustee,  and  in  case  of  the  payment  of  any  such  coupons  the 
Transit  Company  shall  upon  demand  of  the  Trustee  furnish  to 
the  Trustee  satisfactory  evidence  of  the  cancellation  and  ex- 
tinguishment thereof. 

Section  3.  In  case  one  or  more  of  the  events  specified  in 
clauses  (1),  (2),  (3),  (4)  and  (5)  of  the  preceding  Section  2 shall 
happen,  then  and  in  any  such  event  the  Trustee  shall  be  en- 
titled, so  long  as  any  such  event  shall  continue,  in  addition  to 
the  other  rights  and  remedies  of  the  Trustee  provided  in  this 
Indenture,  to  receive  and  collect  the  interest  on  the  pledged 
securities  and  to  enforce,  collect  and  receive  the  in- 
terest and  principal  of  any  and  all  bonds  and  other 
securities  then  held  by  the  Trustee  as  part  of  the  trust 
estate  pursuant  to  the  provisions  of  the  mortgages  securing 
said  bonds  and  other  securities  respectively.  All  sums  so 
collected  or  received  by  the  Trustee,  after  deducting  all  expenses 
incurred  by  the  Trustee  in  the  premises,  shall  be  applied  by  the 
Trustee  as  follows  : In  case  the  principal  of  the  Notes  shall  not 
have  become  due,  first,  to  the  payment  of  any  interest  in  default 
upon  the  Notes  in  the  order  of  the  maturity  of  the  instal- 
ments of  such  interest,  with  interest  thereon  at  the  rate 


20 


of  seven  per  cent,  per  annum,  such  payments  to  be  made  to  the 
persons  entitled  thereto  without  discrimination  or  preference  ; 
second,  to  the  payment  of  any  other  sums  that  then  shall  be 
due  and  payable  by  the  Transit  Company  under  the  pro- 
visions of  this  Indenture  ; and  third,  the  surplus,  if  any,  shall 
be  paid  to  the  Transit  Company  upon  its  w.itten  request 
therefor  if  the  Transit  Company  be  not  then  in  default  under 
this  Indenture.  In  case  the  principal  of  the  Notes  shall  have 
become  due  by  declaration  or  otherwise,  then,  to  the  payment 
of  the  accrued  interest,  with  interest  on  the  overdue  instal- 
ments of  such  interest  at  the  rate  of  seven  per  cent,  per 
annum,  and  to  the  pa3Tmeut  of  the  principal  of  the  Notes,  such 
payment  in  every  case  to  be  made  ratably  to  the  persons 
entitled  to  such  payment  without  any  discrimination  or 
preference — any  surplus  remaining  after  payment  of 
all  such  sums  and  of  any  other  sums  that  then  shall  be 
due  and  payable  by  the  Transit  Company  under  the  provisions 
of  this  Indenture  to  be  paid  to  the  Transit  Company,  upon  its 
written  request  therefor.  These  provisions,  however,  are  not 
intended  to  modify  the  provisions  of  Section  1 of  Article  IV 
and  of  Section  2 of  Article  V of  this  Indenture,  but  are  sub- 
ject thereto.  After  any  default  of  the  character  specified  in 
said  clauses  (1),  (2),  (3),  (4)  and  (5)  of  the  preceding  Section  2 
shall  have  been  made  good,  and  if  the  Transit  Company  be 
not  then  in  default  under  any  of  the  provisions  of  this  Inden- 
ture, the  right  of  tne  Transit  Company  to  receive  and  col- 
lect the  interest  on  the  pledged  securities,  and  the  duty  of  the 
Trustee  to  cut  off  and  cancel  the  coupons  on  any  coupon  bonds 
of  the  Transit  Company  constituting  part  of  the  trust  estate 
and  to  deliver  such  coupons  so  cancelled  to  the  Transit  Com- 
pany, and  the  duty  of  the  Trustee,  as  they  mature,  to  cut  off 
and  deliver  to  the  Transit  Company,  uncancelled,  the  coupons 
appertaining  to  the  First  Mortgage  Bonds  of  the  Subway  Com- 
pany pledged  hereunder,  shall  revive  and  shall  continue  as 
though  no  such  default  had  been  made. 


21 


Section  4.  In  case  any  of  the  First  Mortgage  Bonds  of  the 
Subway  Company  at  any  time  held  by  the  Trustee  hereunder 
shall  be  drawn  for  redemption  or  purchase,  pursuant  to  the 
provisions  of  the  mortgage  securing  the  same  constituting  a 
sinking  fund  for  the  redemption  of  the  First  Mortgage  Bonds, 
the  Trustee  may  surrender  the  First  Mortgage  Bonds  held  here- 
under so  drawn  for  redemption  or  purchase  upon  the  receipt  of 
the  face  amount  thereof,  together  with  the  premium  of  seven  and 
one-half  per  cent,  payable  thereon.  All  amounts  so  received  by 
the  Trustee  shall  be  held  by  it  as  additional  security  for  the 
outstanding  Notes  and  applied  by  the  Trustee  upon  the  writ- 
ten request  of  the  Transit  Company  either  to  the  redemption 
of  Notes  as  provided  in  Article  II  of  this  Indenture  or  to 
the  purchase  of  outstanding  Notes  at  such  price  or  prices  as 
may  be  designated  in  such  request,  not  exceeding,  however, 
the  amount  at  which  such  Notes  would  be  subject  to  redemp- 
tion if  the  same  should  be  called  for  redemption  on  the  then 
next  succeeding  semi-annual  interest  payment  date.  All  Notes 
so  acquired  by  the  Trustee  shall  forthwith  be  cancelled  by  it 
and  delivered  to  the  Transit  Company  upon  its  written  request 
therefor,  and  no  Notes  shall  be  issued  in  lieu  thereof. 

ARTICLE  IV. 

Section  1.  No  coupon  belonging  to  any  Note  which  in  any 
way,  at  or  after  maturity,  shall  have  been  transferred  or 
pledged  separate  and  apart  from  the  Note  to  which  it  relates 
shall,  unless  accompanied  by  such  Note,  be  entitled,  in  case 
of  a default  hereunder,  to  any  benefit  of  or  from 
this  Indenture,  except  after  the  prior  payment  in 
full  of  the  principal  of  all  the  Notes  and  of  all  coupons 
not  so  transferred  or  pledged.  In  case  the  time  for  pay- 
ment of  any  coupon  shall  be  extended,  whether  or  not  such 
extension  be  by  or  with  the  consent  of  the  Transit  Com- 
pany, such  coupon  shall  not  be  entitled  in  case  of  default 
hereunder  to  any  benefit  of  or  from  this  Indenture,  except 


22 


after  the  prior  payment  in  full  of  the  principal  of  all  the 
Notes  then  outstanding,  and  of  all  coupons  on  such  Notes 
the  payment  of  which  shall  not  have  been  so  extended,  with 
interest  on  overdue  instalments  of  interest  at  the  rate  of  seven 
per  cent,  per  annum. 

Section  2.  If  one  or  more  of  the  following  events,  herein- 
after termed  the  events  of  default,  shall  happen,  that  is  to  say : 

(a)  default  shall  be  made  in  the  payment  of  any 
instalment  of  interest  on  any  of  the  Notes  when  and  as 
the  same  shall  become  payable,  as  therein  and  herein 
expressed,  and  such  default  shall  continue  for  the  space 
of  ten  days  ; 

(b)  default  shall  be  made  in  the  payment  of  the 
principal  of  any  of  the  Notes  when  the  same  shall 
become  due  and  payable,  whether  at  maturity  or  by 
declaration  or  otherwise  ; 

(c)  default  shall  be  made  in  the  observance  or 
performance  of  any  of  the  covenants  and  agreements 
on  the  part  of  the  Transit  Company  contained  in 
Section  11  of  Article  V of  this  Indenture  ; 

(d)  default  shall  be  made  in  the  observance  or  per- 
formance of  any  other  of  the  covenants,  conditions  and 
agreements  on  the  part  of  the  Transit  Company,  its 
successors  or  assigns,  in  the  Notes  or  in  this  Indenture 
contained,  and  such  default  shall  continue  for  the  space 
of  thirty  days  after  notice  in  writing  of  such  default  ; 

(e)  default  shall  be  made  in  the  payment  of  any 
instalment  of  interest  when  the  same  shall  become 
payable  on  any  bonds  issued  under  or  secured  by  the 
First  Mortgage  of  the  Subway  Company,  or  in  the  pay- 
ment of  the  sinking  fund  provided  for  in  said  mortgage, 
and  such  default  shall  continue  for  the  period  of  ten 
days  ; or  default  shall  be  made  in  the  payment  of 
the  principal  of  any  of  such  bonds  when  the  same 
shall  become  due  and  payable,  whether  at  maturity 


23 


or  by  declaration  or  otherwise  ; or  default  shall  be 
made  in  the  observance  or  performance  of  any  of  the 
covenants  or  provisions  of  said  First  Mortgage  and  shall 
continue  for  such  period,  if  any,  as  shall  entitle  the 
trustee  thereunder  in  accordance  with  the  provisions 
thereof  to  commence  any  action  or  proceeding  or  to  assert 
or  enforce  any  right  ; 

(f)  default  shall  be  made  in  the  payment  of  any  in- 
stalment of  interest  when  the  same  shall  become  pay- 
able on  any  bonds  issued  under  or  secured  by  the  First 
Refunding  Mortgage  or  the  Consolidated  and  Re- 
funding Gold  Mortgage  of  the  Transit  Company 
while  any  of  the  bonds  of  either  of  said  issues  consti- 
tute part  of  the  trust  estate,  and  such  default  shall 
continue  for  such  period,  if  any,  as  shall  entitle  the 
trustees  under  said  respective  mortgages,  in  accordance 
with  the  provisions  thereof,  to  commence  any  action  or 
to  assert  any  right  thereunder  ; or  default  shall  be 
made  in  the  payment  of  the  principal  of  any  of  such 
bonds  when  the  same  shall  become  due  and  payable, 
whether  at  maturity  or  by  declaration  or  otherwise  ; or 
default  shall  be  made  in  the  observance  or  performance 
of  any  of  the  covenants  or  provisions  of  the  First  Re- 
funding Mortgage  or  of  the  Consolidated  and  Refunding 
Gold  Mortgage  and  shall  continue  for  such  period,  if 
any,  as  shall  entitle  the  trustees  under  said  respective 
mortgages  in  accordance  with  the  provisions  thereof  to 
commence  any  action  or  proceeding  or  to  assert  or 
enforce  any  right  ; 

(g)  default  shall  be  made  under  the  contract  and 
lease  referred  to  in  and  pledged  under  the  mortgage 
of  the  Subway  Compauy  securing  the  First  Mortgage 
Bonds,  which  default  under  the  terms  of  said  contract 
and  lease  is  such  that  the  City  of  New  York  may  termi- 
nate said  lease,  and  provided  such  last  mentioned 
default  shall  continue  after  notice  thereof  given  by 


24 


said  City  for  two-thirds  of  the  period  on  the  expiration 
of  which  the  City  may  so  terminate  said  lease,  and  pro- 
vided also  that  in  the  judgment  of  the  Trustee  action  in 
good  faith  shall  have  not  been  taken  and  prosecuted 
with  sufficient  diligence  to  reasonably  assure  the  curing 
of  such  default  within  said  period  on  the  expiration 
of  which  the  City  may  so  terminate  said  lease  ; 

(/>)  a receiver  shall  be  lawfully  appointed  of  the 
Transit  Company  or  of  its  property,  or  of  the  Subway 
Company  or  of  its  property,  or  of  the  Railroad  Com- 
pany or  of  its  property  ; 

then  and  in  any  such  case,  the  Trustee,  by  notice  in  writing 
delivered  to  the  Transit  Company,  may,  and  shall  upon  the 
written  request  either  of  the  holders  of  not  less  than  twenty- 
five  per  cent,  in  amount  of  the  Notes  at  the  time  outstanding, 
or  of  any  one  holder  of  not  less  than  ten  per  cent,  in  amount 
of  said  Notes  who  shall  have  been  the  holder  of  Notes  to  that 
amount  for  at  least  six  months  next  preceding  the  delivery  of 
such  notice,  declare  the  principal  of  all  the  Notes,  if  not  al- 
already  due  and  payable,  to  be  forthwith  due  and  payable,  and, 
upon  any  such  declaration,  the  same  forthwith  shall  become  and 
be  immediately  due  and  payable,  anything  in  this  Indenture 
or  in  the  Notes  contained  to  the  contrary  notwithstanding. 

This  provision,  however,  is  subject  to  the  condition  that  if 
at  any  time  after  the  principal  of  the  Notes  shall  have  so  be- 
come due  and  payable,  prior  to  the  date  of  maturity  thereof 
stated  in  the  Notes,  all  arrears  of  interest  upon  all  the  Notes 
(witli  interest  at  the  rate  of  seven  per  cent,  per  annum  on  any 
overdue  instalments  of  interest)  and  the  expenses  of  the 
Trustee  shall  be  paid  by  the  Transit  Company  before  the 
sale  of  any  of  the  securities  constituting  the  trust  estate 
shall  have  been  made,  and  every  other  default  in  the  ob- 
servance or  performance  of  any  covenant  or  condition  of 
this  Indenture  shall  be  made  good  or  be  secured  to  the 


25 


satisfaction  of  the  Trustee  or  provision  deemed  by  the  Trustee 
to  be  adequate  shall  be  made  therefor,  then  and  in  every  such 
case  the  holders  of  two-thirds  in  amount  of  the  Notes  then 
outstanding,  by  written  notice  to  the  Transit  Company  and 
to  the  Trustee,  may  waive  the  default  by  reason  of  which  the 
principal  of  the  Notes  has  so  become  due  and  the  conse- 
quences of  such  default,  but  no  such  waiver  shall  extend  to 
or  affect  any  subsequent  default  or  impair  any  right  conse- 
quent thereon. 

Section  3.  If  one  or  more  of  the  events  of  default  shall 
happen,  then,  and  in  each  and  every  such  case,  the  Trustee 
shall,  in  its  discretion,  be  forthwith  entitled,  either  personally 
or  by  its  agents  or  attorneys,  and  forthwith  may  proceed,  to 
sell  and  convert  into  money,  singly  or  collectively,  the  securi- 
ties constituting  the  trust  estate,  and,  upon  the  written  request 
either  of  the  holders  of  not  less  than  twenty-five  per  cent, 
iu  amount  of  the  Notes  at  the  time  outstanding,  or  of  any  one 
holder  of  not  less  than  ten  per  cent,  iu  amount  of  s*aid  Notes 
who  shall  have  been  the  holder  of  Notes  to  that  amount  for  at 
least  six  months  next  preceding  the  delivery  of  such  request, 
and  upon  being  properly  indemnified  as  hereinafter  provided, 
it  shall  be  the  duty  of  the  Trustee  so  to  do  ; such  sale  or  sales 
shall  be  at  public  auction  at  such  place  iu  the  City  of  New  York, 
N.  Y.,  and  at  such  time  and  upon  such  terms,  as  the  Trustee 
may  fix. 

Notice  of  any  sale,  whether  under  and  by  virtue  of  the 
power  of  sale  herein  contained,  or  under  or  by  virtue  of  any 
judgment  or  decree  of  foreclosure  and  sale  or  of  other  judicial 
proceeding,  shall  state  the  time  when  and  the  place  where  the 
same  is  to  be  made,  and  shall  contain  a brief  general  descrip- 
tion of  the  securities  to  be  sold,  and  shall  be  sufficiently  given 
if  published  once  in  each  week  for  four  successive  weeks  prior 
to  such  sale  iu  two  newspapers  of  general  circulation  in  the 
Borough  of  Manhattan,  in  the  City  of  New  York,  in  the  State 


26 


of  New  York.  The  Trustee  may  adjourn  any  such  sale  or  cause 
the  same  to  be  adjourned  from  time  to  time  by  announcement 
at  the  time  and  place  appointed  for  such  sale  or  for  such  ad- 
journed sale  or  sales  ; and  without  further  notice  or  publica- 
tion such  sale  may  be  made  at  the  time  and  place  to  which  the 
same  may  be  so  adjourned. 

Section  4.  Upon  the  completion  of  any  sale  or  sales,  the 
Trustee  shall  deliver  to  t lie  accepted  purchaser  or  purchasers 
the  securities  sold,  with  a transfer  or  transfers  of  all  the  right, 
title  and  interest  of  the  Trustee  in  and  to  such  securities.  The 
Trustee  and  its  successor  or  successors  in  the  trust  are  hereby 
appointed  the  true  and  lawful  attorney  and  attorneys  irrevoc- 
able of  the  Transit  Company,  in  its  name  and  stead  to  make  and 
execute  all  necessary  instruments  of  transfer,  and  for  that  pur- 
pose may  execute  all  necessary  acts  of  assignment  and  transfer, 
and  may  substitute  one  or  more  persons  or  corporations  with 
like  power,  the  Transit  Company  hereby  ratifying  and  continu- 
ing all  that  its  said  attorney  or  attorneys,  or  such  substitute  or 
substitutes,  shall  lawfully  do  by  virtue  hereof.  Nevertheless, 
the  Transit  Company  shall,  if  so  requested  by  the  Trustee, 
ratify  and  confirm  such  sale  by  executing  and  delivering  to 
the  Trustee  or  to  such  purchaser  or  purchasers  all  proper 
transfers  as  may  be  designated  in  such  request. 

Section  5.  Any  sale  or  sales  made  under  or  by  virtue  of 
this  Indenture,  whether  under  any  power  of  sale  hereby 
granted  and  conferred,  or  under  or  by  virtue  of  judicial  pro- 
ceedings, shall  divest  all  right,  title,  interest,  estate,  claim, 
and  demand  whatsoever,  either  at  law  or  in  equity,  of  the 
Transit  Company,  of,  in  and  to  the  securities  sold,  and  shall  be 
a perpetual  bar  both  at  law  and  in  equity  against  the  Transit 
Company,  its  successor*  and  assigns,  and  against  any  aud  all 
persons  claiming  or  to  claim  the  securities  sold  or  any  part 
thereof,  from,  through  or  under  the  Transit  Company,  its  sue- 


27 


cessors  or  assigns  ; and  no  purchaser  at  any  such  sale  or  sales, 
or  his  representatives  or  assigns,  shall  be  bound  to  see  to  the 
application  of  the  purchase  money  upon  or  for  any  trust  or 
purpose  of  this  Indenture,  or  be  answerable  in  any  manner 
whatsoever  for  any  loss,  misapplication  or  non-application  of 
any  such  purchase  money  paid  by  such  purchaser  or  any  part 
thereof. 

Section  6.  The  Trustee,  however,  instead  of  exercising  the 
power  of  sale  herein  conferred  upon  it,  may,  in  its  discretion  aud 
shall,  at  the  request  in  writing  either  of  the  holders  of  a majority 
in  amount  of  the  Notes  then  outstanding,  or  of  any  one  holder 
of  not  less  than  ten  per  cent,  in  amount  of  said  Notes  who  shall 
have  been  the  holder  of  Notes  to  that  amount  for  at  least  six 
months  next  preceding  the  delivery  of  such  request,  proceed  by 
a suit  or  suits  at  law  or  in  equity,  as  the  Trustee  may  be  advised 
by  counsel,  to  enforce  the  payment  of  the  Notes  and  coupons 
and  to  foreclose  this  Indenture  and  sell  the  securities  con- 
stituting the  trust  estate  under  the  judgment  or  decree  of  a 
court  or  courts  of  competent  jurisdiction, 

Section  7.  In  the  event  of  any  sale  under  or  by  virtue  of 
this  Indenture,  whether  under  any  power  of  sale  hereby 
granted  and  conferred  or  under  or  by  virtue  of  judicial  pro- 
ceedings, of  any  of  the  securities  constituting  the  trust  estate, 
the  principal  of  the  Notes,  if  not  already  due  and  payable, 
forthwith  shall  become  due  and  payable,  anything  in  the 
Notes  or  in  this  Indenture  to  the  contrary  notwithstanding. 

Section  8.  In  the  event  of  any  sale  under  or  by  virtue  of 
this  Indenture,  whether  under  any  power  of  sale  hereby 
granted  and  conferred  or  under  or  by  virtue  of  judicial  pro- 
ceedings, the  securities  constituting  the  trust  estate  may,  as 
the  Trustee  shall  deem  most  advantageous  for  the  Note- 
holders, be  sold  either  in  one  parcel  as  an  entirety  or  in 
several  parcels,  aud,  if  in  several  parcels,  in  such  parcels  and 


28 


in  such  order  ;is  the  Trustee  may  determine.  The  Transit 
Company,  for  itself  and  for  all  persons  and  corporations  here- 
after claiming  through  or  under  it,  hereby  expressly  waives 
and  releases  all  right  to  have  the  securities  constituting  the 
trust  estate  marshalled  upon  any  foreclosure  or  other  enforce- 
ment of  this  Indenture. 

Section  9.  The  Trustee  shall,  for  all  purposes  of  this 
Article  IV,  be  considered  and  held  to  be  the  legal  owner 
and  holder  of  the  securities  constituting  the  trust  estate, 
and  shall  have  and  may  exercise  all  the  rights  of  such 
holder  and  owner,  and  may  take  any  action  or  pro- 
ceedings which  the  holder  or  owner  thereof  for  value 
could  take  as  such  owner  or  holder.  All  remedies  conferred 
by  this  Indenture  shall  be  deemed  cumulative  and  not 
exclusive,  and  shall  not  be  deemed  to  deprive  the  Trustee  of 
any  legal  or  equitable  remedy  by  appropriate  judicial  pro- 
ceedings or  otherwise  to  enforce  the  conditions,  covenants  and 
agreements  of  this  Indenture. 

Section  10.  In  case  of  any  sale  of  the  trust  estate,  whether 
under  the  power  of  sale  hereby  granted  or  pursuant  to  judicial 
proceedings,  the  purchase  money,  proceeds  or  avails,  together 
with  any  other  sums  which  may  then  be  held  by  the  Trustee 
or  be  payable  to  it  under  any  of  the  provisions  of  this 
Indenture  as  a part  of  the  trust  estate,  shall  be  applied  as 
follows  : 

(a)  to  the  payment  of  the  costs,  expenses,  fees  and 
other  charges  of  such  sale  or  sales,  and  of  a reasonable 
compensation  to  the  Trustee,  its  agents  and  attorneys, 
and  to  the  payment  of  all  expenses  and  liabilities  in- 
curred and  advances  or  disbursements  made  by  the 
Trustee  ; 

(b ) any  surplus  then  remaining,  to  the  payment  of 
the  whole  amount  owing  or  unpaid  upon  the  Notes,  for 
both  principal  and  interest,  with  interest  on  the  over- 


29 


clue  instalments  of  interest  at  the  rate  of  seven  per 
cent,  per  annum,  and  in  case  such  proceeds  shall  lie 
insufficient  to  pay  in  full  the  whole  amount  so  due  and 
unpaid  upon  the  Notes,  then  to  the  payment  of  such 
principal  and  interest,  ratably,  according  to  the  aggre- 
gate of  such  principal  and  the  accrued  and  unpaid 
interest,  without  preference  or  priority  of  principal  over 
interest  or  of  interest  over  principal,  or  of  any  instal- 
ment of  interest  over  any  other  instalment  of  interest ; 

(c)  any  surplus  then  remaining,  to  the  Transit  Com- 
pany, its  successors  or  assigns,  or  to  whomsoever  may 
be  lawfully  entitled  to  receive  the  same. 

These  provisions,  however,  are  not  intended  in  any  wise  to 
modify  the  provisions  of  Section  1 of  this  Article  IV,  and 
of  Section  2 of  Article  V,  of  this  Indenture,  but  are  subject 
thereto. 

Section  11.  In  ease  of  any  sale  of  the  trust  estate  or  an}7 
part  thereof  in  pursuance  of  the  power  conferred  by 
this  Indenture  or  upon  any  sale  pursuant  to  judicial 
proceedings  for  the  foreclosure  of  this  Indenture  and  the 
sale  of  the  trust  estate,  the  purchaser,  for  the  purpose  of 
making  settlement  or  payment  for  the  securities  purchased, 
shall  be  entitled  to  turn  in  or  apply  towards  the  payment  of 
the  purchase  price,  and  to  be  credited  with,  any  Notes  and 
any  matured  and  unpaid  coupons  to  the  extent  of  the  value 
of  such  Notes  and  coupons  upon  a distribution  among  the 
Noteholders  of  the  net  proceeds  of  such  sale  after  making  the 
deductions  allowable  under  the  terms  hereof  for  the  costs  and 
expenses  of  the  sale  and  otherwise.  But  such  Notes  and 
coupons  so  applied  in  payment  by  the  purchaser  shall  be 
deemed  to  be  paid  only  to  the  extent  so  applied.  At  any  such 
sale,  the  Trustee  or  any  Noteholder  or  Noteholders  or  his,  its 
or  their  agents  may  bid  for  and  purchase  the  securities  so  sold 
and  may  make  payment  therefor  as  aforesaid,  and,  upon  com- 
pliance with  the  terms  of  sale,  may  hold,  retain  and  dispose 


30 


of  such  securities  without  further  accountability,  and  the 
receipt  of  the  Trustee  shall  be  a sufficient  discharge  for 
the  purchase  money  to  any  purchaser  of  the  securities,  or 
any  part  thereof,  sold  under  an}'  of  the  provisions  of  this 
Indenture. 

Section  12.  In  case  of  the  happening  of  one  or  more  of  the 
events  of  default,  the  Transit  Company,  upon  demand  of  the 
Trustee,  covenants  and  agrees  to  pay  to  the  Trustee,  for  the 
benefit  of  the  holders  of  the  Notes  and  coupons  then  outstand- 
ing, the  whole  amount  due  and  payable  on  all  of  the  Notes 
and  coupons  for  principal  and  interest,  with  interest  upon  the 
overdue  principal  and  instalments  of  interest  at  the  rate 
of  seven  per  cent,  per  annum  ; and,  in  case  the  Transit 
Company  shall  fail  to  pay  the  same  forthwith  upon  such  de- 
mand, the  Trustee,  in  its  own  name  and  as  trustee  of  an  ex- 
press trust,  shall  be  entitled  to  recover  judgment  for  the  whole 
amount  so  due  and  unpaid.  The  Trustee  shall  be  entitled  to 
recover  judgment,  as  aforesaid,  either  before  or  after  or  dur- 
ing the  pendency  of  any  proceedings  for  the  enforcement  of 
the  lien  of  this  Indenture  upon  the  trust  estate,  and  its 
right  to  recover  such  judgment  shall  not  be  affected  by  any 
sale  hereunder,  or  by  the  exercise  of  any  other  right,  power  or 
remedy  for  the  enforcement  of  the  provisions  of  this  In- 
denture, or  by  the  foreclosure  of  the  lieu  hereof,  and,  in 
case  of  a sale  of  the  trust  estate  and  of  the  application  of  the 
proceeds  of  sale  to  the  payment  of  the  indebtedness  repre- 
sented by  the  Notes  and  coupons,  the  Trustee,  in  its  own  name 
and  as  trustee  of  an  express  trust,  shall  be  entitled  to  receive, 
and  to  enforce  payment  of,  any  and  all  deficiency  or 
amounts  then  remaining  due  and  unpaid  upon  any  or 
all  of  the  Notes  and  coupons  then  outstanding  for  the 
benefit  of  the  holders  thereof,  and  shall  be  entitled  to  re- 
cover judgment  for  any  portion  of  such  indebtedness  remaining 
unpaid,  with  interest.  No  recovery  of  any  judgment  by  the 


31 


Trustee  and  no  levy  of  any  execution  under  any  such  judg- 
ment upon  the  property  subject  to  the  lien  of  this  Indenture 
or  upon  any  other  property  shall  in  any  manner  or  to 
any  exteut  affect  or  impair  the  lieu  of  the  Trustee  upon  the 
trust  estate,  or  any  part  thereof,  or  any  rights,  powers  or  rem- 
edies of  the  Trustee  hereunder,  or  any  rights,  powers  or  rem- 
edies of  the  holders  of  the  Notes  ; but  such  lien,  rights, 
powers  and  remedies  shall  continue  unaffected  and  unim- 
paired as  before.  Any  moneys  thus  collected  by  the  Trus- 
tee under  this  Section  12  shall  be  applied  by  the  Trus- 
tee : first,  to  the  payment  of  the  costs  and  expenses 
of  the  proceedings  resulting  in  the  collection  of  such 
moneys  and  of  the  reasonable  compensation  and  expenses  of 
the  Trustee  ; and,  second,  toward  payment  of  the  amounts 
then  due  and  unpaid  upon  the  Notes  and  coupons  respectively, 
without  any  preference  or  priority  of  any  kind,  but  ratably 
according  to  the  amounts  due  and  payable  upon  the  Notes  and 
coupons,  respectively,  at  the  date  fixed  by  the  Trustee  for  the 
distribution  of  such  moneys.  These  provisions,  however,  are 
not  intended  in  any  wise  to  modify  the  provisions  of  Section  1 
of  this  Article  IV,  and  Section  2 of  Article  V,  of  this  Inden- 
ture, but  are  subject  thereto. 

ARTICLE  V. 

The  Transit  Company  covenants  to  and  with  the  Trustee 
as  hereinafter  in  this  Article  set  forth  : 

Section  1.  Duly  and  punctually  the  Transit  Company  will 
pay  or  cause  to  be  paid,  to  the  holders  of  each  of  the  Notes, 
the  principal  thereof  and  the  interest  accruing  thereon,  all  in 
gold  coin  of  the  United  States  of  America,  of  or  equal  to  the 
present  standard  of  weight  and  fineness,  at  the  dates  and  place 
and  in  the  manner  mentioned  in  the  Notes  and  in  the  coupons 
thereto  appertaining,  according  to  the  true  intent  and  meaning 
thereof,  without  deduction  from  either  principal  or  interest  for 


32 


any  tax  or  governmental  charge  (other  than  Federal  income 
taxes  in  excess  of  two  per  cent,  per  annum,  and  other  than 
any  state  or  municipal  income  taxes)  which  the  Transit 
Company  or  the  Trustee  may  be  required  to  pay  or  to  deduct 
therefrom  under  or  by  reason  of  any  present  or  future 
law  of  the  United  States  of  America,  or  of  any  state,  county, 
municipality  or  other  taxing  authority  therein.  The  interest 
shall  be  payable  only  upon  presentation  and  surrender  of  the 
respective  coupons  annexed  to  the  Notes  as  such  coupons  re- 
spectively mature  ; and,  when  and  as  paid,  all  coupons  shall 
forthwith  be  cancelled. 

Section  2.  In  order  to  prevent  any  accumulation  of 
coupons  after  maturity,  the  Transit  Company  will  not, 
directly  or  indirectly,  extend  or  assent  to  the  extension  of 
the  time  for  the  payment  of  an}’  coupon  upon  any  Note  ; 
and  the  Transit  Company  will  not,  directly  or  indi- 
rectly, be  a party  to  or  approve  any  such  arrangement 
by  purchasing  or  funding  said  coupons  or  in  any  other 
manner.  In  case  the  time  for  payment  of  any  such  cou- 
pon shall  be  so  extended,  whether  or  not  such  extension 
be  by  or  with  the  consent  of  the  Transit  Company,  such 
coupon  shall  not  be  entitled,  in  case  of  default  hereunder,  to 
the  benefit  or  security  of  this  Indenture,  except  subject 
to  the  prior  payment  in  full  of  the  principal  of  all  the  Notes 
then  outstanding,  and  of  all  coupons  on  such  Notes,  the  pay- 
ment of  which  shall  not  have  been  so  extended,  with  interest 
on  overdue  instalments  of  interest  at  the  rate  of  seven  per 
cent,  per  annum. 

Section  3.  The  Transit  Company  will,  from  time  to  time, 
duly  pay  and  discharge  all  taxes  and  governmental  charges 
lawfully  imposed  upon  the  trust  estate  or  upon  any  part 
thereof,  or  upon  the  income  and  profits  thereof,  and  also  all 
taxes  and  governmental  charges  lawfully  imposed  upon  the 


33 


lien  or  interest  of  the  Trustee  or  of  the  holders  of  the  Notes 
in  respect  of  the  trust  estate  ; provided,  however,  unless  such 
payments  shall  be  necessary,  in  the  opinion  of  the  Trustee,  in 
order  to  prevent  prejudice  or  loss  to  the  trust  estate,  the 
Transit  Company  shall  not  be  required  to  pay  any  such 
taxes  or  governmental  charges  so  long  as  in  good  faith  the 
validity  thereof  shall  be  contested  by  appropriate  legal  pro- 
ceedings. 

Section  4.  The  Transit  Company  will,  at  all  times  until  the 
payment  of  the  principal  of  the  Notes,  either  keep  an  office  or  an 
agency  in  the  Borough  of  Manhattan,  in  the  City  of  New  York, 
where  notices  and  demands  in  respect  to  the  Notes  and  cou- 
pons may  be  served,  and  will,  by  written  notice,  designate 
such  office  or  agency  to  the  Trustee,  or  will  designate,  by  writ- 
ten notice  to  the  Trustee,  a bank  or  trust  company  in  said  city 
for  such  purposes.  In  default  of  any  such  office  or  agency, 
or  of  any  such  designation,  notices  and  demands  maybe  served 
at  the  office  in  the  City  of  New  Yoik  of  the  Trustee  or  any 
successor  to  it  in  the  trust. 

Section  5.  The  First  Refunding  Bonds  mentioned  and  de- 
scribed in  paragraph  (1)  of  clause  (A)  of  the  granting  clauses 
of  this  Indenture  and  all  of  said  bonds  have  been  duly  and 
validly  issued  in  accordance  with  law,  and  have  been  duly 
authenticated  and  delivered  in  accordance  with  the  mortgage 
by  which  they  are  secured,  and  the  Transit  Company  is  duly 
authorized  by  law  validly  to  pledge  the  same  under  this 
Indenture  on  the  terms  hereof.  The  mortgage  securing  the 
First  Refunding  Bonds  has  been  duly  authorized,  executed 
and  delivered  in  accordance  with  law  and  constitutes  valid 
security,  according  to  the  terms  thereof,  for  said  bonds. 

Section  6.  The  First  Mortgage  Bonds  mentioned  and  de- 
soibedin  paragraph  (2)  of  clause  (A)  of  the  granting  clauses  of 


34 


this  Indenture  and  all  of  said  bonds  ha  ve  been  duly  and  validly 
issued  in  accordance  with  law,  and  have  been  duly  authenticated 
and  delivered  in  accordance  with  the  mortgage  by  which  they 
are  secured,  and  have  been  duly  and  lawfully  acquired  by  the 
Transit  Company,  and  the  Transit  Company  is  duly  author- 
ized by  law  validly  to  pledge  the  same  under  this  Indenture 
on  the  terms  hereof.  The  mortgage  securing  the  First  Mort- 
gage Bonds  has  been  duly  authorized,  executed  and  delivered 
in  accordance  with  law  and  constitutes  valid  security,  accord- 
ing to  the  terms  thereof,  for  said  bonds. 

Section  7.  The  Consolidated  Bonds  mentioned  and  de- 
scribed in  clause  (B)  of  the  granting  clauses  of  this 
Indenture  and  all  of  said  bonds  have  been  duly  and 
validly  issued  in  accordance  with  law,  and  have  been 
duly  authenticated  and  delivered  in  accordance  with  the 
mortgage  by  which  the}'  are  secured,  and  the  Transit 
Company  is  duly  authorized  by  law  validly  to  pledge  the 
same  under  this  Indenture  on  the  terms  hereof.  The 
mortgage  securing  the  Consolidated  Bonds  has  been  duly 
authorized,  executed  aud  delivered  in  accordance  with  law 
and  constitutes  valid  security,  according  to  the  terms  thereof, 
for  said  bonds. 

Section  8.  Until  all  of  the  Notes  shall  have  been  paid  in  full, 
both  principal  and  interest,  the  Transit  Company  will  from  time 
to  time  deposit  and  pledge  with  the  Trustee  hereunder  Consoli- 
dated Bonds  of  the  Transit  Company  (in  addition  to  the  bonds 
mentioned  and  described  in  clause  (B)  of  the  granting  clauses  of 
this  Indenture)  to  an  amount  equal  at  the  face  value  of  said 
bonds  to  expenditures  made  by  the  Transit  Company  at  any 
time  out  of  its  current  surplus  earnings  for  capital  purposes  and 
for  which  the  Transit  Company  may  be  or  become  entitled 
to  the  authentication  and  delivery  of  Consolidated  Bonds 
from  the  trustee  under  the  mortgage  securing  said  bonds. 


35 


The  Transit  Company  will  from  time  to  time  and  as  soon  as 
practicable  after  the  expenditure  of  the  amounts  so  expended 
by  it,  procure  the  authentication  and  delivery  of  the  Consoli- 
dated Bonds  to  which  it  may  be  or  become  entitled  in  respect 
of  any  such  expenditures  and  forthwith  upon  the  authentica- 
tion and  delivery  to  it  of  such  Consolidated  Bonds  will  deposit 
and  pledge  the  same  with  the  Trustee  under  this  Indenture. 
In  case  expenditures  for  which  the  Transit  Company  may  be 
or  become  entitled  to  the  authentication  and  delivery  of  Con- 
solidated Bonds  shall  be  made  by  the  Transit  Company  at 
any  time  for  capital  purposes  otherwise  than  out  of  its  current 
surplus  earnings,  tire  Consolidated  Bonds  to  the  authentica- 
tion and  delivery  of  which  the  Transit  Company  may  be  or 
become  entitled  in  respect  of  any  expenditures  so  made  shall, 
for  the  purposes  of  this  Section  8 and  of  the  granting 
clauses  of  this  Indenture,  he  deemed  to  have  been 
made  out  of  such  current  surplus  earnings  if  and  to 
the  extent  that  any  amount  may  subsequently  be  deducted 
from  or  charged  against  the  current  surplus  earnings  of  the 
Transit  Company  in  respect  of  any  expenditures  so  made. 
Any  and  all  Consolidated  Bonds  deposited  and  pledged 
with  the  Trustee  as  provided  in  this  Section  8,  ami  in 
Section  1 of  Article  III  of  this  Indenture,  prior  to 
such  deposit  and  pledge,  will  have  been  duly  and  validly 
issued  in  accordance  with  law,  and  will  have  been  duly 
authenticated  and  delivered  in  accordance  with  the  mortgage 
by  which  they  are  secured,  and  the  Transit  Company  will  be 
duly  authorized  by  law  validly  to  pledge  the  same  under  this 
Indenture  on  the  terms  hereof.  The  Consolidated  Bonds  de- 
liverable to  the  Trustee  under  this  Section  8 may  be  of  such 
series,  bear  such  date  and  date  of  maturity  and  such  rate  of 
interest  as  may  from  time  to  time  be  determined  by  the  board 
of  directors  of  the  Transit  Company  pursuant  to  the  terms 
and  provisions  of  the  mortgage  securing  said  bonds. 


36 


Section  9.  Until  all  of  the  Notes  shall  have  been  paid  in 
full,  both  principal  and  interest,  the  Transit  Company  will 
from  time  to  time  deposit  and  pledge  with  the  Trustee  here- 
under all  First  Mortgage  Bonds  of  the  Subway  Company  (in 
addition  to  the  bonds  mentioned  and  described  in  paragraph 
(2)  of  clause  (A)  of  the  granting  clauses  of  this  Indenture) 
purchased  or  acquired  by  the  Transit  Company  at  any  time 
out  of  its  current  surplus  earnings.  Any  and  all  First 
Mortgage  Bonds  so  purchased  or  acquired  by  the  Transit 
Company  shall  forthwith  upon  the  purchase  or  acquisition 
thereof  by  the  Transit  Company  be  deposited  and  pledged 
with  the  Trustee  under  this  Indenture.  Any  First  Mortgage 
Bonds  purchased  or  acquired  by  the  Transit  Company  at 
any  time  otherwise  than  out  of  its  current  surplus  earnings 
shall,  for  the  purposes  of  this  Section  9 and  of  the  granting- 
clauses  of  this  Indenture,  be  deemed  to  have  been 
purchased  or  acquired  out  of  such  current  surplus  earn- 
ings if  and  to  the  extent  that  any  amount  may  subsequently 
be  deducted  from  or  charged  against  the  current  sur- 
plus earnings  of  the  Transit  Company  in  respect  of  the  First 
Mortgage  Bonds  so  purchased  or  acquired.  Any  and  all 
First  Mortgage  Bonds  deposited  and  pledged  with  the  Trustee 
as  provided  in  this  Section  9,  prior  to  such  deposit  and  pledge, 
will  have  been  duly  and  validly  issued  in  accordance  with  law, 
and  will  have  been  duly  authenticated  and  delivered  in 
accordance  with  the  mortgage  by  which  they  are  secured,  and 
will  have  been  duly  and  lawful^  acquired  by  the  Transit 
Company,  and  the  Transit  Company  will  be  duly  authorized 
by  law  validly  to  pledge  the  same  under  this  Indenture  on  the 
terms  hereof. 

Section  10.  The  payment  of  the  principal  and  interest 
of  all  First  Mortgage  Bonds  of  the  Subway  Company  at 
any  time  deposited  and  pledged  with  the  Trustee  under 
this  Indenture  and  the  payment  of  the  sinking  fund  pro- 


37 


vided  for  in  the  mortgage  securing  said  bonds,  prior  to 
such  deposit  and  pledge,  (1)  will  have  been  validly  and  effec- 
tively by  due  and  lawful  corporate  action  guaranteed  and 
assumed  by  the  Railroad  Company  and  the  obligation  of 
the  Railroad  Company  in  such  respect  shall  be  endorsed  upon 
each  and  every  such  First  Mortgage  Bond ; and  (2)  will 
have  been  validly  and  effectively  by  due  and  lawful  corporate 
action  assumed  by  the  Transit  Company  and  the  obligation 
of  the  Transit  Company  in  such  respect  shall  be  endorsed 
upon  each  and  every  such  First  Mortgage  Bond.  Such  obliga- 
tion of  the  Railroad  Company,  in  respect  to  its  guaranty 
and  assumption  of  the  payment  of  the  principal,  interest  and 
sinking  fund  of  the  First  Mortgage  Bonds,  will  be  secured  by 
the  mortgage  of  the  Railroad  Company  to  Central  Trust  Com- 
pany of  New  York  as  trustee  dated  February  1,  1913. 

Section  11.  Until  all  of  the  Notes  shall  have  been  paid 
in  full,  both  principal  and  interest,  the  Transit  Company 
will  not  declare  or  pay  auy  dividend  in  cash  upon  the 
capital  stock  of  the  Transit  Company  and  will  not  declare  or 
pay  any  dividend  upon  its  capital  stock  in  an}?  security  or 
scrip  unless  such  security  or  scrip  shall  by  its  terms  rank 
subsequent  to  the  rights  of  the  holders  of  the  Notes  as  against 
any  of  the  assets  of  the  Transit  Company. 

Section  12.  The  Transit  Company  has  duly  complied  with 
all  the  requirements  of  law  in  that  behalf  in  order  to  author- 
ize the  Transit  Company,  and  the  Transit  Company  is  duly 
authorized,  to  execute  and  deliver  this  Indenture  and  to 
pledge  or  to  cause  to  be  pledged  under  this  Indenture  as 
herein  provided  the  securities  and  property  described  in  the 
granting  clauses  hereof  and  all  thereof  and  to  issue  and  dis- 
pose of  the  Notes. 

Section  13.  This  Indenture  is  and  at  all  times  until  the 
payment  in  full  of  the  Notes,  both  principal  and  interest,  will  be 


38 


kept  and  maintained  as  a first  lien  and  charge  upon  all  the 
bonds  and  other  securities  and  property  at  the  time  deposited 
and  pledged  with  the  Trustee  hereunder. 

Section  14.  The  Transit  Company  will  do,  execute,  ac- 
knowledge and  deliver,  or  cause  to  be  done,  executed,  acknowl- 
edged and  delivered,  all  and  every  such  farther  acts,  deeds,  trans- 
fers and  assurances  for  the  better  assuring,  conveying  and  con- 
firming unto  the  Trustee  all  and  singular  the  securities  hereby 
assigned,  or  intended  so  to  be,  as  the  Trustee  shall  reasonably 
require  for  better  accomplishing  the  provisions  and  purposes 
of  this  Indenture  and  for  better  securing  the  payment  of  the 
principal  and  interest  of  the  Notes. 


ARTICLE  VI. 

Section  1.  The  Trustee  accepts  the  trusts  of  this  In- 
denture and  agrees  to  execute  them  upon  the  following 
terms  and  conditions,  to  which  the  parties  and  the  holders  of 
the  Notes  agree  : 

The  Trustee  shall  be  under  no  obligation  to  see  to 
the  tiling,  registration  or  leeord  of  this  Indenture,  and 
may  and  shall  authenticate  and  deliver  the  Notes  in 
accordance  with  the  provisions  hereof,  notwithstanding 
this  Indenture  shall  not  have  been  tiled,  registered  or 
recorded. 

The  Trustee  shall  be  entitled  to  reasonable  compen- 
sation for  all  services  rendered  by  it  in  the  execution  of 
the  trusts  hereby  created,  and  such  compensation,  as 
well  as  the  reasonable  compensation  of  its  counsel  and 
of  such  persous  as  it  mav  employ  in  the  administration 
or  management  of  the  trust,  and  all  other  reasonable 
expenses  necessarily  incurred  and  actually  disbursed 
hereunder,  the  Transit  Company  agrees  to  pay,  and  for 


39 


such  payment  the  Trustee  shall  have  a lien  on  the 
trust  estate  under  this  Indenture  in  priority  to  the 
rights  and  claims  of  the  holders  of  the  Notes. 

The  Trustee  shall  not  be  responsible  in  any  manner 
whatsoever  for  the  recitals  herein  or  in  the  Notes 
contained,  all  of  which  are  made  by  the  Transit  Com- 
pany solely. 

The  Trustee  shall  not  be  responsible  for  or  in  re- 
spect of  the  validity  or  sufficiency  of  this  Inden- 
ture, or  the  execution  thereof  by  the  Transit  Company, 
nor  for  or  in  respect  of  the  title,  value  or  validity  of  the 
securities  constituting  the  trust  estate,  nor  for  or  in  re- 
spect of  the  validity  or  enforceability  of  any  endorse- 
ment, guaranty  or  agreement  upon,  of  or  in  respect  to 
the  First  Mortgage  Bonds. 

Unless  and  until  the  Trustee  shall  have  received 
written  notice  to  the  contrary  from  the  holders  of  not 
less  than  five  per  cent,  in  amount  of  the  Notes  out- 
standing, the  Trustee  may,  for  all  the  purposes  of  this 
Indenture,  assume  that  the  Transit  Company  is  not  in 
default  under  this  Indenture  and  that  none  of  the  events 
hereinbefore  denominated  events  of  default  has  hap- 
pened. 

The  Trustee  shall  not  be  under  any  obligation  to 
take  any  action  toward  the  execution  or  enforcement  of 
the  trusts  hereby  created  which,  in  its  opinion,  will  be 
likely  to  involve  it  in  expense  or  liability,  unless  one  or 
more  of  the  holders  of  the  Notes  shall,  as  often  as  re- 
quired by  the  Trustee,  furnish  it  reasonable  security 
and  indemnity  against  such  expense  or  liability  ; nor 
shall  the  Trustee  be  required  to  take  action  in  respect 
of  any  default  unless  requested  by  an  instrument  in 
writing  signed  either  by  the  holders  of  not  less  than 
twenty-five  per  cent,  in  amount  of  the  Notes  then  out- 
standing, or  by  any  one  holder  of  not  less  than  ten  per 


40 


cent,  in  amount  of  said  Notes  who  shall  have  been  the 
holder  of  Notes  to  that  amount  for  at  least  six  months 
next  preceding  the  delivery  of  such  written  instrument 
to  the  Trustee,  anything  herein  contained  to  the  con- 
trary notwithstanding  ; but  neither  any  such  notice  or 
request,  nor  this  provision  therefor,  shall  affect  any 
discretion  herein  given  to  the  Trustee  to  determine 
whether  or  not  the  Trustee  shall  take  action  in  respect 
to  such  default  or  to  take  action  without  such  request. 

Whenever  in  this  Indenture  it  is  provided  that  the 
Trustee  shall,  or  may,  act  upon  the  order,  demand  or 
request  of  the  Company,  such  order,  demand  or  request 
shall  be  sufficient  and  shall  constitute  full  and  complete 
authority  and  protection  for  any  action  taken  or  suffered 
by  the  Trustee  in  pursuance  thereof,  if  such  order,  de- 
mand or  request  is  in  writing  signed  by  the  president 
or  a vice-president  and  bv  the  secretary  or  an  assistant 
secretary  of  the  Transit  Company,  under  its  corporate 
seal. 

The  Trustee  shall  be  fully  protected  in  acting  upon, 
or  in  accordance  with,  any  notice,  order,  demand,  re- 
quest, consent,  certificate,  bond,  note,  coupon  or  other 
instrument  or  paper  or  signature  believed  by  it  to  be 
genuine  and  to  have  been  signed  or  presented  by  the 
proper  person  or  duly  authorized  or  properly  made. 

The  Trustee  may  employ  agents  or  attorneys  in  fact, 
and  shall  not  be  answerable  for  the  default  or  miscon- 
duct of  any  agent  or  attorney  appointed  by  it  in  pursu- 
ance hereof,  if  such  ageut  or  attorney  shall  have  been 
selected  with  reasonable  care,  nor  for  anything  what- 
ever in  connection  with  this  trust,  except  its  own  willful 
misconduct  or  gross  negligeuce. 

The  Trustee  shall  be  reimbursed  and  indemnified  by 
the  Transit  Company  against  any  liability  or  damages 
it  may  sustain  or  incur  in  the  premises,  and  shall  have 


41 


a lien  upon  the  trust  estate  under  this  Indenture  in 
priority  to  the  rights  and  claims  of  the  holders  of  the 
Notes  for  its  compensation  and  expenses,  and  also  for 
any  such  liability  or  damages. 

The  Trustee  may  advise  with  legal  counsel  and  shall 
be  protected  in  respect  of  any  action  under  this 
Indenture,  taken  or  not  taken  in  good  faith  by  the 
Trustee  in  accordance  with  the  opinion  of  counsel. 

Section  2.  The  Trustee  may  resign  and  be  discharged 
from  the  trusts  created  by  this  Indenture  by  giving  to  the 
Transit  Company  notice  in  writing,  and  to  the  Noteholders 
notice  by  publication,  of  such  resignation,  specifying  a date 
when  such  resignation  shall  take  effect,  which  notice  shall  be 
published  at  least  once  not  less  than  thirty  days  nor  more 
than  sixty  days  prior  to  the  date  so  specified,  in  a daily  news- 
paper of  general  circulation  in  the  Borough  of  Manhattan,  in 
the  City  of  New  York,  N.  Y.  Such  resignation  shall  take 
effect  on  the  day  specified  in  such  notice,  unless  previously  a 
successor  trustee  shall  have  been  appointed  as  hereinafter 
provided,  in  which  event  such  resignation  shall  take  effect 
immediately  upon  the  appointment  of  such  successor  trustee. 

Any  trustee  hereunder  may  be  removed  at  any  time  by  an 
instrument  in  writing  filed  with  the  Trustee  and  executed  by 
the  holders  of  three-fourths  in  amount  of  the  Notes  then  out- 
standing. 

Section  3.  In  case  at  any  time  the  Trustee  shall  resign  or 
shall  be  removed  or  otherwise  shall  become  incapable  of 
acting,  a successor  may  be  appointed  by  the  holders  of  a 
majority  in  amount  of  the  Notes  then  outstanding,  by  an  in- 
strument or  concurrent  instruments  signed  by  such  Note- 
holders or  their  attorneys  in  fact  duly  authorized  ; but  until 
a new  Trustee  shall  be  appointed  by  the  Noteholders  as  herein 
authorized,  the  Transit  Company,  by  an  instrument  executed 
under  its  corporate  seal  by  order  of  its  board  of  directors 


42 


or  of  the  executive  committee  of  said  board,  may  ap- 
point a trustee  to  fill  such  vacancy.  Every  such  successor 
trustee,  whether  appointed  by  the  Noteholders  or  by  the 
Transit  Company,  shall  always  be  a trust  company  having 
an  office  in  the  Borough  of  Manhattan,  in  the  City  of 
New  York,  N.  Y.,  and  having  a capital,  undivided  profits 
and  surplus  aggregating  at  least  five  million  dollars. 
After  any  such  appointment  by  the  Transit  Company,  it  shall 
cause  notice  of  such  appointment  to  be  published  once  a 
week  in  each  of  four  successive  weeks  in  two  daily  news- 
papers of  general  circulation  in  the  Borough  of  Manhattan, 
in  the  City  of  New  York  ; but  any  new  trustee  so  ap- 
pointed by  the  Transit  Company  shall  immediately,  and  with- 
out further  act,  be  superseded  by  a trustee  appointed,  in  the 
manner  above  provided,  by  the  holders  of  a majority  in  amount 
of  the  Notes  at  the  time  outstanding. 

Section  4.  xkny  successor  trustee  appointed  hereunder  shall 
execute,  acknowledge  and  deliver  to  the  Transit  Company  an 
instrument  accepting  such  appointment  hereunder,  and  there- 
upon such  successor  trustee,  without  any  further  act,  deed  or 
conveyance,  shall  become  vested  with  the  title  to  the  trust  es- 
tate, and  with  all  the  rights,  powers,  trusts,  duties  and  obliga- 
tions of  its  predecessor  in  the  trust  hereunder,  with  like  effect 
as  if  originally  named  as  trustee  herein,  and  the  trustee  ceas- 
ing to  act  shall,  on  the  written  request  of  such  successor  trus- 
tee, assign  and  transfer  the  trust  estate  or  cause  the  trust 
estate  to  be  assigned  and  transferred  to  the  successor  trustee, 
and  shall  be  entitled  to  the  payment  of  its  charges  and  ex- 
penses theretofore  incurred.  Upon  request  of  such  successor 
trustee,  the  Transit  Company  shall  execute  and  deliver  such 
instruments  of  assignment  and  further  assurance  as  may 
reasonably  be  required  for  more  full}7  and  certainly  vesting  in 
and  confirming  to  such  successor  trustee  all  the  right,  title  and 
interest  of  the  predecessor  trustee  in  and  to  the  trust  estate 
and  such  rights,  powers,  trusts,  duties  and  obligations.  All 


43 


conveyances  and  instruments  herein  provided  for  shall  he  at 
the  cost  of  the  Transit  Company. 

Section  5.  For  the  purposes  of  this  Article,  the  fact  of  the 
holding  of  Notes  by  any  holder  and  the  amounts  and  issue 
numbers  of  such  Notes  and  the  date  of  the  holding  of  the 
same,  may  be  proved  either  in  the  manner  specified  in  Article 
VIII  or  by  affidavits  of  the  Noteholders. 

Section  6.  Any  company  into  which  the  Trustee,  or 
any  successor  to  it  in  the  trusts  created  by  this  Indenture, 
may  be  merged  or  with  which  it,  or  any  such  successor 
to  it,  may  be  consolidated,  or  any  company  resulting  from 
any  merger  or  consolidation  to  which  the  Trustee,  or 
any  successor  to  it,  shall  be  a party,  provided  such  company 
shall  be  a corporation  organized  under  the  laws  of  the  State 
of  New  York  and  shall  do  business  in  the  Borough  of  Man- 
hattan, in  the  City  of  New  York,  shall  be  the  successor  trustee 
under  this  Indenture  without  the  execution  or  filing  of 
any  paper  or  any  further  act  on  the  part  of  any  of  the  parties 
hereto,  anything  herein  to  the  contrary  notwithstanding. 

Section  7.  The  term  Trustee,  wherever  used  in  this  Inden- 
ture, means  the  trustee  for  the  time  being  under  this  Indenture, 
whether  original  or  successor. 

ARTICLE  VII. 

Section  1.  No  holder  of  any  Note  or  coupon  shall  have  the 
right  to  institute  any  suit,  action  or  proceeding  at  law  or  in 
equity  upon  or  in  respect  of  this  Indenture,  or  for  the 
execution  of  any  trust  or  power  hereof,  or  for  any 
other  remedy  under  or  upon  this  Indenture,  unless  such 
holder  shall  previously  have  given  to  the  Trustee  writ- 
ten notice  of  an  existing  default  and  of  the  con 
tinuance  thereof  as  hereinbefore  provided  ; nor  unless  also 
the  holders  of  five  per  cent,  in  amount  of  the  Notes  then 
outstanding  shall  have  made  written  request  upon  the  Trustee 


44 


after  the  happening  of  an  event  of  default,  and  shall  have 
afforded  to  it  reasonable  opportunity,  either  to  proceed  itself 
to  exercise  the  powers  hereinbefore  granted,  or  to  institute 
such  action,  suit  or  proceeding  in  its  own  name  ; nor  unless 
also  such  holder  or  holders  shall  have  offered  to  the  Trustee 
adequate  security  and  indemnity  against  the  costs,  expenses 
and  liabilities  to  be  incurred  in  or  by  reason  of  such  action, 
suit  or  proceeding  ; and  such  notification,  request  and  offer  of 
indemnity  are  hereby  declared,  in  every  such  case,  at  the 
option  of  the  Trustee,  to  be  conditions  precedent  to  the  exe- 
cution of  the  powers  aud  trusts  of  this  Indenture  and  to 
any  action  or  cause  of  action  for  foreclosure  or  for  any  other 
remedy  hereunder,  it  being  intended  that  no  one  or  more 
holders  of  the  Notes  or  coupons  shall  have  any  right  in  any 
manner  whatever  to  affect,  disturb  or  prejudice  the  lien  of 
this  Indenture  by  his  or  their  action,  or  to  enforce  any 
right  hereunder,  except  in  the  manner  herein  provided,  aud 
that  all  proceedings  hereunder  shall  be  instituted,  had  and 
maintained  in  the  manner  herein  provided  aud  for  the 
equal  benefit  of  all  holders  of  the  outstanding  Notes  aud 
coupons. 

The  foregoing  provisions  of  this  Section  are  iutended 
only  for  the  protection  of  the  Trustee,  aud  shall  not  be  con- 
strued to  affect  any  discretion  or  power  by  any  provision 
of  this  Indenture  given  to  the  Trustee  to  determine 
whether  or  not  it  shall  take  action  in  respect  of  any  default 
without  such  notice  or  request  from  Noteholders,  or  to  affect 
any  other  discretion  or  power  given  to  the  Trustee. 

Section  2.  No  delay  or  omission  of  the  Trustee,  or  of  any 
holder  of  Notes,  to  exercise  any  right  or  power  accruing  upon 
any  default  shall  impair  any  such  right  or  power,  or  shall  be 
construed  to  be  a waiver  of  any  such  default  or  acquiescence 
therein  ; and  every  power  and  remedy  given  by  this  In- 
denture to  the  Trustee  or  to  the  Noteholders  may  be  exer- 
cised from  time  to  time,  and  as  often  as  may  be  deemed  expe- 
dient, by  the  Trustee  or  by  the  Noteholders. 


45 


ARTICLE  VIII. 

Auy  request  or  other  instrument  required  by  this  In- 
denture to  be  signed  and  executed  by  Noteholders  may  be 
in  any  number  of  concurrent  instruments  of  similar  tenor, 
and  may  be  executed  by  such  Noteholders  in  person  or  by  an 
agent  or  attorney  appointed  by  an  instrument  in  writing. 
Proof  of  the  execution  of  auy  such  request  or  other  instru- 
ment, or  of  a writing  appointing  any  such  agent  or  attorney, 
or  of  the  holding  by  any  person  of  Notes,  shall  be  sufficient 
for  any  purpose  of  this  Indenture,  and  shall  be  conclusive 
in  favor  of  the  Trustee  with  regard  to  any  action  taken  by 
the  Trustee  under  such  request  or  other  instrument,  if  made  in 
the  following  manner,  viz.  : 

(a)  the  fact  and  date  of  the  execution  by  any  person 
of  any  such  request  or  of  any  other  instrument  in 
writing  may  be  proved  by  the  certificate  of  any  notary 
public  or  other  officer  authorized  to  take,  either  within 
or  without  the  State  of  New  York,  acknowledgments  of 
deeds  to  be  recorded  in  said  State,  certifying  that  the 
person  signing  such  request  or  other  instrument 
acknowledged  to  him  the  execution  thereof ; or  by  the 
affidavit  of  a witness  to  such  execution  ; 

(b)  the  fact  of  the  holding  by  any  person  of  Notes 
transferable  by  delivery  and  the  amounts,  denominations 
and  issue  numbers  of  the  Notes  held  by  such  person  and 
the  date  of  his  holding  the  same  may  be  proved  by  a 
certificate  executed  by  any  trust  company,  bank,  banker 
or  other  depositary  wheresoever  situated,  whose  certifi- 
cate shall  be  deemed  by  the  Trustee  to  be  satisfactory, 
stating  that,  at  the  date  therein  mentioned,  such  person 
had  on  deposit  with  such  depositary,  or  exhibited  to 
such  depositary,  the  Notes  numbered  and  described  in 
such  certificate  ; 


4(5 


(c)  the  ownership  of  Notes  registered  otherwise 
than  to  bearer  shall  be  proved  by  the  registers  of  such 
Notes. 


ARTICLE  IX. 

This  Indenture  shall  not  be  construed  to  create  any  trust, 
liability  or  obligation  to  or  in  favor  of  any  person,  firm 
or  corporation  except  the  Transit  Company,  the  Trustee  and 
the  present  or  future  holders  of  the  Notes  and  coupons,  noth- 
ing in  this  Indenture  being  intended  to  confer  upon,  or 
to  give  t<>,  an 3'  person  or  corporation,  other  than  the  parties 
hereto  and  the  holders  of  the  Notes  and  coupons,  any  right, 
remedy  or  claim  in,  under  or  by  reason  of  this  Indenture, 
or  any  covenant,  condition  or  stipulation  hereof  ; all  the 
covenants,  conditions  and  stipulations  hereof  being  intended 
to  be,  and  being,  for  the  sole  and  exclusive  benefit  of  the 
parties  hereto  and  their  successors,  and  of  the  holders  of  the 
Notes  and  coupons. 


ARTICLE  X. 

No  recourse  under  or  upon  any  obligation,  covenant  or 
agreement  of  this  Indenture  or  of  any  Note  or  coupou 
shall  be  had  against  any  stockholder,  officer  or  director  of 
the  Transit  Company  as  such,  either  diiectly  or  through  the 
Transit  Company,  by  the  enforcement  of  any  assessment  or  by 
any7  legal  or  equitable  proceeding  by  virtue  of  any7  statute 
or  constitutional  provision  or  otherwise.  This  Indenture 
and  the  Notes  are  solely  corporate  obligations,  and  no  per- 
sonal liability  whatever  shall  attach  to  or  be  incurred  by  the 
stockholders,  officers  or  directors  of  the  Transit  Company  as 
such  uuder  or  by  reason  of  any  of  the  obligations,  covenants 
or  agreements  contained  in  the  Indenture  or  in  any  of 
the  Notes  or  coupons,  and  any  or  all  personal  liability  of  every 


47 


such  stockholder,  officer  or  director  as  such,  either  at  common 
law  or  in  equity,  or  by  statute  or  constitution,  is  waived. 

ARTICLE  XI. 

The  Transit  Company  will  not  at  any  time  insist  upon,  or 
plead,  in  any  manner  whatever  claim  or  take  the  benefit  or 
advantage  of,  any  stay  or  extension  law  wherever  enacted,  now 
or  at  any  time  hereafter  in  force  ; nor  will  it  claim,  take,  or 
insist  upon  any  benefit  or  advantage  from  any  law  now  or 
hereafter  in  force  providing  for  the  valuation  or  appraisement 
of  the  trust  estate,  or  of  any  of  the  securities  constituting 
the  trust  estate,  prior  to  any  sale  or  sales  thereof  to  be  made 
pursuant  to  any  provision  herein  contained  or  to  the  decree  of 
any  court  of  competent  jurisdiction  ; and  the  Transit  Company 
hereby  expressly  waives  all  benefits  or  advantage  of  any  such 
law  or  laws,  and  covenants  that  it  will  not  hinder,  delay  or 
impede  the  execution  of  any  power  herein  granted  and  dele- 
gated to  the  Trustee,  but  will  suffer  and  permit  the  execution 
of  every  such  power  as  though  no  such  law  or  laws  had  been 
made  or  enacted. 


ARTICLE  XII. 

Section  1.  If  said  sums  of  money  in  the  Notes  mentioned, 
as  well  the  principal  as  the  interest  thereof,  shall  be  well  and 
truly  paid  at  the  times  and  in  the  manner  therein  expressed, 
according  to  the  tenor  and  effect  thereof,  and  the  Transit  Com- 
pany shall  faithfully  observe  and  perform  its  covenants  and 
agreements  herein  contained,  then  and  in  such  case  the  estate, 
right,  title  and  interest  of  the  Trustee,  its  successors  in  the 
trust  and  its  and  their  assigns,  in  the  trust  estate,  shall  cease, 
determine  and  become  void,  and  upon  proof  being  given  to  the 
reasonable  satisfaction  of  the  Trustee  that  all  the  Notes  at 
any  time  issued,  together  with  the  interest  thereon,  have  been 
paid  off  or  satisfied,  and  upou  payment  of  all  costs,  charges 


48 


and  expenses  incurred  by  the  Trustee  and  reasonable  compen- 
sation to  the  Trustee,  the  Trustee  shall,  on  the  written  de- 
mand of  the  Transit  Company  and  at  the  cost  and  expense  of 
the  Transit  Company,  assign  and  deliver  the  trust  estate  to 
the  Transit  Company  or  its  assigns,  and  shall  cancel  and 
satisfy  this  Indenture. 

Section  2.  The  Transit  Company  or  its  assigns  shall 
have  the  right,  on  or  before  the  maturity  of  the  Notes, 
to  deposit  with  the  Trustee,  to  the  credit  of  the  holder 
or  holders  of  all  the  Notes  which  shall  not  have  been 
presented  to  the  Transit  Company  for  payment,  the  amount 
due  thereon  for  principal  and  interest  to  the  maturity  thereof, 
and  thereupon,  upon  proof,  to  the  satisfaction  of  the 
Trustee,  that  all  other  of  the  Notes  at  any  time  issued, 
together  with  the  interest  thereon,  have  been  paid  or  re- 
deemed and  cancelled,  and  upon  payment  of  all  costs, 
charges  and  expenses  incurred  by  the  Trustee  and  of 
reasonable  compensation  to  the  Trustee,  the  Trustee  shall, 
on  the  written  demand  and  at  the  cost  and  expense  of 
the  Transit  Company,  assign  and  deliver  the  trust  estate  to 
the  Transit  Company  or  its  assigns,  and  shall  cancel  and 
satisfy  this  Indenture,  and  the  Trustee  shall  apply  the 
moneys  so  deposited  with  it  to  the  payment  of  such  outstand- 
ing Notes  as  shall  be  presented  to  it  for  such  purpose,  together 
with  accrued  interest  thereon  to  the  date  of  the  maturity 
thereof. 

Central  Union  Trust  Company  of  New  York,  Trustee, 
party  hereto  of  the  second  part,  whose  principal  office  and 
place  of  business  and  legal  residence  is  in  the  Borough  of 
Manhattan,  City,  County  and  State  of  New  York,  hereby  ac- 
cepts the  trusts  in  this  indenture  declared  and  provided  and 
agrees  to  perform  the  same  upon  the  terms  and  conditions 
herein  set  forth. 

In  witness  whereof  Brooklyn  Rapid  Transit  Company  has 
caused  its  corporate  seal  to  be  hereunto  affixed  and  this  Inden- 


49 


ture  to  be  signed  by  its  president  or  a vice-president  and 
by  its  secretary  or  an  assistant  secretary,  and  Central  Union 
Trust  Company  of  New  York,  in  token  of  its  acceptance  of 
this  trust,  has  caused  its  corporate  seal  to  be  hereunto  affixed 
and  this  Indenture  to  be  signed  by  one  of  its  vice-presidents 
and  by  its  secretary  or  an  assistant  secretary,  all  as  of  the  first 
day  of  July,  1918. 

Executed  in  four  counterparts. 


Brooklyn  Rapid  Transit  Company, 


Approved  as  to  form. 


By 


A.  M.  W. 


T.  S.  Williams 


(Corporate  Seal.) 
Attest : 


President. 


J.  H.  Bennington 


Secretary. 


Witnesses : 


A.  M.  Williams 
H.  R.  Potts 


H.  V.  P. 


Central  Union  Trust  Company  of  New  York, 

by 

G.  W.  Davison 


(Corporate  Seal) 
Attest : 


Vice-president. 


M.  Ferguson 


Secretary. 


Witnesses  : 


Henry  V.  Poor 
M.  E.  Hellstern 


50 


State  of  New  York,  ) 

> ss. : 

County  of  New  York,  S 

On  this  14th  day  of  August,  1918,  before  me  personally 
came  T.  S.  Williams,  to  me  personally  known,  who  being  by 
me  duly  sworn  did  depose  and  say  that  he  resides  in  Hunting- 
ton,  Long  Island,  State  of  New  York ; that  he  is  the  president 
of  Brooklyn  Rapid  Transit  Company,  one  of  the  corporations 
described  in  and  which  executed  the  foregoing  instrument ; 
that  he  knows  the  seal  of  said  corporation ; that  the  seal 
affixed  to  the  foregoing  instrument  is  such  corporate  seal  ; that 
it  was  so  affixed  by  order  of  the  board  of  directors  of  said 
corporation,  and  that  he  signed  his  name  thereto  by  like 
order. 

H.  R.  Potts, 

(Seal)  Notary  Public,  Kings  Co.  No.  62. 

Certificate  filed  Kings  Co.  Reg.  157, 
Queens  Co.  Clk.  No.  1433. 

Comm.  Expires  March  30,  1920. 

State  of  New  York,  ) 

> ss. : 

County  of  New  York,  ) 

On  this  14th  day  of  August,  1918,  before  me  personally 
appeared  Geo.  W.  Davison,  to  me  personally  known,  who  being 
by  me  duly  sworn  did  depose  and  say  that  he  resides  in  the 
Borough  of  Manhattan,  City  and  State  of  New  York  ; that  he 
is  a vice-president  of  Central  Union  Trust  Company  of  New 
York,  one  of  the  corporations  described  in  and  which  executed 
the  foregoing  instrument ; that  he  knows  the  seal  of  said 
corporation  ; that  the  seal  affixed  to  the  foregoing  instrument 
is  such  corporate  seal ; that  it  was  so  affixed  by  order  of  the 
board  of  trustees  of  said  corporation,  and  that  he  signed  his 
name  thereto  by  like  order. 

M.  E.  Hellstern, 

(Seal)  Notary  Public  Kings  Co.  No.  77. 

Certificate  filed  in  N.  Y.  Co.  No.  186. 


[17656J 


